WASHINGTON — The U.S. Securities and Exchange Commission said on Friday it was moving to dismiss its insider-trading lawsuit against Terren Peizer, a former healthcare executive who was convicted of insider trading and later pardoned by President Donald Trump.
Peizer, 67, founded and formerly led healthcare company Ontrak. The SEC filed a civil enforcement action against him in 2023, alongside a criminal case brought by the U.S. Department of Justice. Authorities alleged that Peizer sold more than $20 million of Ontrak shares between May and August 2021 while possessing material nonpublic information about deteriorating business involving the company's largest customer.
The SEC's civil case ran parallel to the criminal prosecution. The agency's complaint alleged unlawful insider trading, while prosecutors pursued criminal charges over the same underlying trading activity. Ontrak has previously disclosed in regulatory filings that the SEC filed its civil complaint against Peizer on March 1, 2023.
A federal jury in Los Angeles convicted Peizer in 2024 on two counts of insider trading and one count of securities fraud. He was sentenced in 2025 to 3-1/2 years in prison.
President Trump pardoned Peizer in January 2026. The pardon ended the federal criminal consequences of his conviction, while the SEC's civil action remained pending until the agency's latest move to dismiss it.
The case attracted attention because prosecutors said it was the first criminal prosecution centered on the misuse of a prearranged stock-selling program known as a Rule 10b5-1 plan. Such plans are intended to allow corporate insiders to schedule trades in advance and can provide protection against allegations that transactions were timed around material nonpublic information.
Peizer was also a former protege of Michael Milken, the financier who pleaded guilty to securities fraud and served prison time before receiving a presidential pardon from Trump in 2020.
The SEC's action follows other instances in which the agency has abandoned civil enforcement proceedings involving individuals who received presidential clemency during Trump's second term. The agency's Friday filing puts the civil insider-trading litigation against Peizer on course for dismissal.
