Terren Scott Peizer, Insider Trading, California 2024
A former Miami-based health care company CEO has been sentenced to 42 months in prison for engaging in an insider trading scheme using Rule 10b5-1 stock trading plans to avoid losses of more than $12.5 million.
Terren Scott Peizer, 65, a resident of Puerto Rico and Santa Monica, was sentenced by U.S. District Judge Dale S. Fischer on June 24, 2024, who also ordered him to pay a fine of $5.25 million and forfeit more than $12.7 million in ill-gotten gains.
“Terren Peizer betrayed the trust of Ontrak’s investors, trading on inside information to offload company stock before a substantial price decline,” said Matthew R. Galeotti, Head of the Criminal Division.
“Insiders must not be allowed to put their thumbs on the scales of the stock market,” said U.S. Attorney Bill Essayli for the Central District of California. “Individuals who impugn the integrity of our markets can and will face prison time for their crimes.
According to the investigation, on May 2021, Peizer entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and its largest customer was deteriorating, and that the customer had expressed serious reservations about continuing its contract with Ontrak.
In August 2021, Peizer entered into his second 10b5-1 trading plan minutes after Ontrak’s chief negotiator for the contract told Peizer that the contract likely would be terminated. Peizer refused to engage in any “cooling-off” period, despite warnings from two brokers, a senior Ontrak executive, and attorneys.
In June 2024, Peizer was found guilty after a 10-day jury trial of one count of securities fraud and two counts of insider trading. The case is part of a data-driven initiative led by the Criminal Division’s Fraud Section to identify executive abuses of 10b5-1 trading plans.
The FBI investigated the case. The Justice Department appreciates the substantial assistance of FINRA’s Criminal Prosecution Assistance Group.
Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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