SEC drops insider trading case against healthcare exec pardoned by Trump

The U.S. Securities and Exchange Commission (SEC) announced on Friday that it is moving to dismiss its insider trading lawsuit against Terren Peizer, a former healthcare executive who was convicted by a federal jury in 2024 and later pardoned by President Donald Trump.

Peizer, 65, founded and served as CEO of Ontrak, a healthcare company. In 2023, the Department of Justice charged him with insider trading, and the SEC filed parallel civil charges. Authorities at the time described the case as groundbreaking, marking the first criminal prosecution involving a pre-arranged stock-selling plan designed to shield executives from such allegations.

Prosecutors said Peizer sold more than $20 million of Ontrak stock between May and August 2021 while possessing material, non-public negative information about the company's largest customer. A federal jury in Los Angeles convicted him in 2024 on two counts of insider trading and one count of securities fraud. He was sentenced in 2025 to three and a half years in prison.

Trump pardoned Peizer in January of this year. Peizer was a protégé of Michael Milken, the former financier once known as Wall Street's "junk bond king." Trump had also pardoned Milken in 2020 during his first term, after Milken pleaded guilty to securities fraud and served about two years in prison.

Critics and rights advocates have frequently cited such pardons as examples of double standards, particularly as Trump has pursued a hardline immigration crackdown using fraud claims against some migrants, notably in Minnesota earlier this year.