LAS VEGAS (KTNV) — The CEO of Henderson-based health care company Ontrak Inc. is being accused of participating in an insider trading scheme.
That's according to the U.S. Attorney's Office for the Central District of California.
Court documents state that between May and August 2021, 63-year-old Terren Peizer avoided more than $12.5 million in losses by entering into two Rule 10b5-1 trading plans while knowing information that had not been made public. Investigators said that's after he learned the relationship between Ontrak and the company's then-largest customer was deteriorating.
An indictment claims Peizer later learned the customer informed Ontrak of its intent to end their contract and Peizer began selling shares of Ontrak on the next trading day after establishing each plan.
Officials claim that on August 19, 2021, just six days after Peizer adopted one of those plans, Ontrak announced the customer had terminated its contract and the company's stock price went down by more than 44%.
"The FBI and our partners are committed to holding insiders accountable at all levels, including those who act in bad faith when establishing trading plans in order to evade regulations," Donald Alway, Assistant Director in Charge of the FBI Los Angeles field office, said. "Americans must have trust in the marketplace and that can only be achieved when offenders who violate their obligations are held responsible."
Peizer is facing several counts of insider trading and securities fraud. If convicted, he could spend up to 20 years in prison for each charge.
Channel 13 reached out to Peizer and his attorneys who said he is innocent.
"Mr. Peizer is innocent. The government has clearly overreached in this case, especially since they have disregarded the good faith discussions regarding the facts and circumstances of this inquiry which took place before these cases were filed without any prior notice."
