In a stunning turn of events, Terren Scott Peizer, the former CEO and chairman of Ontrak, a health care company based in Nevada, has been convicted of a multimillion-dollar insider trading scheme. Peizer faced charges after setting up plans to sell shares in 2021 to avoid losses of over $12.5 million when he learned that Ontrak’s largest customer was terminating its contract with the company. This insider information caused Ontrak’s stock price to drop by more than 44% when made public.
Despite the conviction, Peizer’s lawyer, David Willingham, plans to appeal, stating that Peizer relied on the advice of his management team when setting up the trading plans. However, Deputy Assistant Attorney General Nicole M. Argentieri, who leads the Justice Department’s Criminal Division, declared that they will continue to prosecute corporate executives who trade on inside information while hiding behind trading plans established in bad faith.
Peizer resigned as CEO in March after being indicted and has consistently maintained his innocence of the charges. This case marks a significant victory for the Justice Department and serves as a warning to corporate executives who engage in insider trading schemes. It also highlights the importance of ethical leadership and transparency within companies to prevent such schemes from occurring in the future.