The Securities and Exchange Commission has dropped an insider trading lawsuit against a former healthcare executive who was convicted in a related criminal case and later pardoned by President Donald Trump, according to Bloomberg. The executive was Terren Scott Peizer, the former chairman and CEO of Ontrak Inc., a publicly traded healthcare company.
The SEC's decision ends civil enforcement action against the executive. The agency did not detail its reasoning publicly, but the move follows a pattern of the current administration reducing or dismissing federal regulatory actions against individuals who received presidential pardons.
The executive had faced both a criminal conviction and a parallel civil suit brought by the SEC. Civil and criminal insider trading cases often run alongside each other, with the SEC pursuing financial penalties and disgorgement of profits while federal prosecutors seek prison time. A presidential pardon wipes out a criminal conviction but does not automatically end civil liability, which made the SEC's choice to drop the case a separate legal decision.
Insider trading cases in healthcare typically involve executives who trade on non-public information about drug approvals, clinical trial results, or merger activity before that information becomes available to the public. The SEC has historically pursued these cases aggressively because the gains can be substantial and the harm to ordinary investors significant.
The SEC did not immediately respond to requests for comment on the decision, according to Bloomberg's reporting. The agency under the current administration has shifted several of its enforcement priorities since Trump returned to office, including pulling back from some cases initiated under prior leadership.
The dismissal closes the civil chapter of a case that began with a criminal conviction. With the pardon already in place and the SEC now stepping back, the executive faces no remaining federal legal exposure in the matter.