Securities Regulation Daily Wrap Up, ENFORCEMENT—C.D. Cal.: SEC drops 10b5-1action following Trump pardon, (Aug 11, 2026)
Law Firms Mentioned:Brown Rudnick LLP
Organizations Mentioned:Brown Rudnick, LLP | Cigna
By Anne Sherry, J.D.
The criminal charges had been the first based exclusively on an executive’s use of 10b5-1 trading plans.
The SEC dismissed an insider trading action against Terren S. Peizer and his personal LLC. The agency had charged Peizer with establishing Rule 10b5-1 trading plans upon learning material nonpublic information. He was sentenced to 3.5 years in a parallel criminal action, but while his appeal was pending, he received a presidential pardon (Joint Stipulation to Dismiss and Releases, (SEC v. Peizer, No. 2:23-cv-01511-DSF-MBK (C.D. Cal. filed Aug. 7, 2026)).
Background. As alleged, Peizer, the former CEO/chairman of health care company Ontrak Inc., used material nonpublic information to enter into two 10b5-1 trading plans via his personal investment vehicle. The plans’ sale of shares allegedly avoided more than $12 million in losses when Ontrak lost its then-largest customer, Cigna.
The indictment marked the first time the DOJ brought criminal insider trading charges based exclusively on an executive’s use of 10b5-1 trading plans.
Stipulation of dismissal. The SEC and the defendants stipulated to the enforcement action’s dismissal with prejudice.
The stipulation simply says that the SEC believes that dismissal is appropriate and that the agency’s decision does not necessarily reflect its position in any other case.
The case is No. 2:23-cv-01511-DSF-MBK.
Attorneys: James P. Connor for the SEC. Angela M. Papalaskaris (Brown Rudnick LLP) for Terren S. Peizer.
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