SEC drops insider trading suit against ex-healthcare executive pardoned by Trump

By Kanishka Singh

WASHINGTON, Aug 7 (Reuters) – The U.S. Securities and Exchange Commission said on Friday it was moving to dismiss an insider trading lawsuit against Terren Peizer, a former healthcare executive who was convicted of insider trading by a federal jury in 2024 and then pardoned by President Donald Trump.

Here are the details:

• In 2023, Peizer, 65, the founder and former chief executive of healthcare company Ontrak, was charged by the Department of Justice with insider trading.

• The SEC also launched civil insider trading charges against him in a parallel action.

• At the time, authorities called the charges groundbreaking. It was the first criminal case involving the use of a pre-arranged stock-selling program designed to help shield executives from such charges.

• Peizer sold more than $20 million of Ontrak stock between May and August 2021 while in possession of material non-public negative information related to the company’s largest customer, authorities said.

• He was convicted of insider trading by a federal jury in Los Angeles in 2024. Jurors found him guilty of two counts of insider trading and one count of securities fraud.

• He was sentenced in 2025 to 3.5 years in prison.

• Trump pardoned him in January this year.

• Peizer was a protege of Michael Milken, once considered Wall Street’s “junk bond king.”

• In 2020 during his first term, Trump had pardoned Milken, who had previously pleaded guilty to securities fraud and served about two years in prison.

• Critics and rights advocates have often pointed to such pardons as examples of double standards as Trump has used fraud claims against some migrants to pursue a hardline immigration crackdown, especially in Minnesota earlier this year.

(Reporting by Kanishka Singh in Washington; Editing by Edwina Gibbs)