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Fortune
Fortune
Amanda Gerut

Former CEO sentenced to prison for stock trades in milestone case

Ontrak Cigna Prison Aetna United States DOJ Fortune
Photo of Bill Essayli (Credit: Photo by PATRICK T. FALLON/AFP via Getty Images)
  • Former Ontrak CEO Terren Scott Peizer has been sentenced to 42 months of prison time in a first-ever prosecution based exclusively on Rule 10b5-1 trading plans, authorities announced on Monday. The plans are relied upon by thousands of U.S. executives at publicly traded companies. A lawyer for Peizer told Fortune the case will be appealed and said the evidence at trial showed Peizer did not commit insider trading. 

The 65-year-old founder and former CEO of behavioral health care provider Ontrak was sentenced to 42 months in prison and ordered to pay $17.9 million in fines and restitution, making Terren Scott Peizer the first executive ever convicted in a criminal case based exclusively on the abuse of Rule 10b5-1 trading plans, according to the Department of Justice.

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