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2mo ago

Former Ontrak Chief Sentenced to 42 Months for 10b5-1 Insider Trading Scheme

A federal judge imposed prison time, fines and forfeiture after finding that Peizer used Rule 10b5-1 plans to sidestep market losses in a case that highlights the Justice Department’s drive to curb executive trading abuses.

US Attorney for the Central District of California Bilal Essayli said insiders should not be allowed to "put their thumbs on the scales of the stock market."

Overview

  • On June 23, 2025, U.S. District Judge Dale S. Fischer handed Terren Scott Peizer a 42-month prison sentence after his conviction on securities fraud and insider trading charges.
  • Peizer was ordered to pay a $5.25 million fine and forfeit more than $12.7 million gained through stock sales under his 10b5-1 trading plans.
  • Prosecutors determined that Peizer set up two Rule 10b5-1 plans in May and August 2021 while in possession of non-public information about Ontrak’s largest customer ending its contract.
  • Six days after his second trading plan took effect, Ontrak disclosed the contract termination and its shares plunged over 44%.
  • The FBI investigated with FINRA support and the DOJ’s Fraud Section prosecuted the case as part of a new data-driven initiative targeting executive abuses of trading plans.