Court Updates for the Week of June 30, 2025 in Los Angeles
A former CEO and chairman of the board of directors of Ontrak Inc., a Miami-based health care company, has been sentenced to 42 months in federal prison due to his involvement in an insider trading scheme that allowed him to evade losses exceeding $12.5 million. Terren Scott Peizer, aged 65 and residing in Puerto Rico and Santa Monica, received this sentence from United States District Judge Dale S. Fischer along with additional penalties such as a $5.2 million fine and restitution of $12.7 million.
Following a 10-day trial in June 2024, Peizer was convicted of one count of securities fraud and two counts of insider trading by a jury. Matthew R. Galeotti, who leads the Justice Department’s criminal division, commented on Peizer’s actions, stating that he had abused the faith of Ontrak’s investors by engaging in insider trading based on confidential information to sell company stocks before a significant price drop. This punishment handed down to Peizer reflects the dedication and diligence of the criminal division in prosecuting fraudulent activities that negatively impact American investors. The criminal division aims to utilize all available resources to address complex fraud cases that exploit the securities markets.
U.S. attorney Bill Essayli also weighed in on this issue, emphasizing that insiders should not be allowed to manipulate stock markets for personal gain. Those who compromise the integrity of financial markets will be held accountable through legal measures, including serving prison time for their unlawful behavior. This legal case is part of an initiative spearheaded by the Justice Department’s Criminal Division’s Fraud Section, which focuses on identifying instances of executive misconduct related to 10b5-1 trading plans.
Rule 10b5-1 trading plans have become subjects of scrutiny due to potential abuses by individuals in powerful positions to gain unfair advantages. The case involving Peizer serves as an example of the government’s commitment to addressing such fraudulent practices and protecting the interests of investors in the securities market. Insider trading is a serious offense that undermines the transparency and fairness of financial transactions, and the legal system is prepared to take decisive action against those who engage in such deceptive activities.
The sentencing of Peizer underscores the consequences of insider trading and sends a clear message that individuals who breach the trust of investors and manipulate the stock market will face severe penalties. The criminal division remains vigilant in pursuing cases of fraud that threaten the integrity of the financial system and will continue to uphold the principles of accountability and justice in prosecuting such offenses.