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{{pp|small=yes}}
{{Short description|American investment manager}}
{{Use mdy dates|date=October 2024}}
{{Infobox person
{{Infobox person
|name = Terren Scott Peizer
|name = Terren Scott Peizer
|image =
|image =
|image_size =
|alt =
|alt =
|caption =
|caption =
|birth_date = {{Birth date and age|1959|7|31}}<ref name="auto5">{{Cite web|url=https://www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer|title=UNITED STATES V. TERREN S. PEIZER; PENDING CRIMINAL DIVISION CASES; Court Docket: 2:23-CR-89|date=March 1, 2023|website=The United States Department of Justice}}</ref>
|birth_name =
|birth_place = [[Beachwood, Ohio]]
|birth_place = [[Beachwood, Ohio]], U.S.
⚫
|alma_mater = [[Wharton School of the University of Pennsylvania]] (B.S., Economics)
|residence =
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|occupation = Businessperson
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|alma_mater = [[Wharton School of the University of Pennsylvania]]
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|years_active = 1983–present
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|occupation = International Financier
| known_for =
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|years_active =
*former [[junk bond]] salesman at [[Drexel Burnham Lambert]] who testified against [[Mike Milken]] in securities fraud prosecution in exchange for [[Legal immunity|immunity]]
|net_worth = 50 Million <ref>http://articles.latimes.com/1994-07-31/business/fi-22082_1_high-rollers</ref>
*former CEO of Ontrak Inc., convicted of [[insider trading]] and [[securities fraud]]
|boards =
|boards =
|religion = Jewish
|spouse =
|spouse =
| criminal_charges = convicted of insider trading (two counts) and securities fraud (2024)
|children =
| criminal_penalty = Peizer faces a maximum penalty of 65 years in prison<ref name="auto23">Dave Michaels (June 21, 2024). [https://www.wsj.com/finance/regulation/jury-convicts-milken-protege-terren-peizer-of-insider-trading-7c78ba2a "Jury Convicts Milken Protégé Terren Peizer of Insider Trading; Ex-Ontrak chairman was accused of abusing trading strategy that usually shields executives against suspicions of insider trading,"] ''The Wall Street Journal''.</ref>
|parents =
| criminal_status = Peizer is slated to be sentenced on October 21, 2024.<ref name="auto23"/><ref name="auto22">{{Cite web|url=https://patch.com/california/santamonica/santa-monica-ceo-guilty-12-5m-insider-trading-scheme|title=Santa Monica CEO Guilty In $12.5M Insider Trading Scheme; The former chief executive of a publicly traded health care company used insider information to avoid losses of more than $12.5 million.|date=June 21, 2024|website=Santa Monica, CA Patch}}</ref>
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'''Terren Scott Peizer''' (born July 31, 1959) is an American businessperson.<ref name="auto7">{{Cite web|url=https://www.wsj.com/market-data/quotes/US/OTRK/company-people/executive-profile/42582270|title=OTRK.US Company Profile & Executives - Ontrak Inc.|website=The Wall Street Journal}}</ref> On June 21, 2024, he was found guilty by a California federal jury of three counts of [[insider trading]] and [[securities fraud]], following a nine-day trial. Peizer faces a maximum penalty of 65 years in prison.
'''Terren Scott Peizer''' dubbed the "Zelig of Wall Street"<ref>http://www.nytimes.com/1998/02/17/business/market-place-no-sales-but-watch-the-stock-soar.html</ref> <ref> Taub, Stephen. “From rats to riches.” Financial World, Apr 26, 1994.</ref> is currently the Chairman of Los Angeles based investment company, Crede Capital Group (CCG)<ref>http://www.credecg.com</ref>. CCG has provided alternative investment strategies to publicly traded companies with capital commitments and funding in excess of $900 million.<ref>SEC.gov</ref><ref>http://finance.yahoo.com/news/Private-Placement-Equity-iw-1867479401.html?x=)</ref> Peizer also serves as Chairman of Acuitas Capital Group,<ref>https://www.crunchbase.com/organization/acuitas-capital-group#/entity</ref><ref> Chardan Capital Markets Group Research Report http://www.xxiicentury.com/site/files/Xxii%202014-10-01%20$2.52%20China%20JV,%20Another%20Billion%20Dollar%20Opportunity.pdf</ref>


Peizer is the former CEO and chairman of Ontrak Inc., a publicly traded healthcare company, which he resigned from in March 2023 after US authorities charged him with insider trading and securities fraud.<ref name="auto5"/><ref name="auto4">{{Cite web|url=https://www.reuters.com/business/healthcare-pharmaceuticals/ontrak-ceo-peizer-resigns-after-being-charged-insider-trading-2023-03-03/|title=Ontrak CEO Peizer resigns after being charged for insider trading|date=March 3, 2023|publisher=Reuters}}</ref><ref name="Mobihealth">{{Cite news |last=Hackett |first=Mallory |date=November 3, 2020 |title=Ontrak deepens its behavioral health platform with LifeDojo acquisition |language=en |work=MobiHealthNews |url=https://www.mobihealthnews.com/news/ontrak-deepens-its-behavioral-health-platform-lifedojo-acquisition |access-date=November 25, 2020}}</ref> He formerly worked as a [[junk bond]] salesman at [[Drexel Burnham Lambert]], and ultimately testified against his former boss [[Mike Milken]] in Milken's securities fraud prosecution, in exchange for [[Legal immunity|immunity]] from both [[criminal prosecution]] and [[U.S. Securities and Exchange Commission|SEC]] sanctions.<ref name="auto12">{{Cite web|url=https://www.forbes.com/forbes/1999/0906/6405054a.html|title=Small world, ain't it?|website=Forbes|date=September 6, 1999}}</ref> He also held executive positions in small-cap technology, debt collection, bicycle tire, shoe importing, and biotech companies.<ref name="NYT4thImmunity">{{Cite news |last=Labaton |first=Stephen |date=December 10, 1988 |title=4th Drexel Employee in Immunity Bargain |language=en-US |work=The New York Times |url=https://www.nytimes.com/1988/12/10/business/4th-drexel-employee-in-immunity-bargain.html |access-date=November 25, 2020 |issn=0362-4331}}</ref><ref>{{cite news|url=https://www.nytimes.com/1990/10/20/business/kohlberg-kravis-official-tells-of-a-hidden-milken-stake.html|title=Kohlberg, Kravis Official Tells of a Hidden Milken Stake|newspaper=The New York Times|date=October 20, 1990 |last1=Eichenwald |first1=Kurt }}</ref>
Raised in Beachwood, Ohio, a suburb of Cleveland, Peizer has frequently noted the importance of his family and his Ohio upbringing in various interviews. Although he has been called "One of Wall Street’s top players"<ref> Taub, Stephen. “From rats to riches.” Financial World, Apr 26, 1994.</ref>, Peizer has exhibited a humble and modest lifestyle consistent with his Midwestern upbringing. It is believed that he still lives in the same condominium he first purchased in the 1980s when he moved to California.


== Early life and education ==
Over the years, Mr. Peizer has been the largest beneficial stockholder and has held various senior executive positions within several technology and biotech companies<ref>http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=10961832-1376-9749&type=sect&TabIndex=2&companyid=85191&ppu=%252fdefault.aspx%253fcik%253d1136174</ref>. Peizer, a graduate of the Wharton School of the University of Pennsylvania has extensive background in venture capital, investing, Mergers and Acquisitions and corporate finance. He has provided his expertise and assisted companies by assembling management teams, boards of directors and scientific advisory boards, formulating business and financial strategies, and establishing investor relations. Mr. Peizer has held senior executive positions with some of the top investment banking firms such as Goldman Sachs, First Boston and Drexel Burnham Lambert.
Peizer's hometown is [[Beachwood, Ohio]].<ref name="LATimes Shadow">{{Cite news |last=Lee |first=Patrick |date=July 31, 1994 |title=In the Shadow of the '80s: Yesterday's High Rollers Struggle in a New Era of Sobriety |language=en-US |work=Los Angeles Times |url=https://www.latimes.com/archives/la-xpm-1994-07-31-fi-22082-story.html |access-date=November 26, 2020}}</ref> He attended [[Beachwood High School]].<ref name=cleve>{{cite news |last1=Polien Light |first1=Nina |title=An entrepreneur with heart |url=https://www.clevelandjewishnews.com/archives/an-entrepreneur-with-heart/article_3deceb1d-451b-537d-a78c-0a1511d807e0.html |access-date=February 6, 2022 |work=Cleveland Jewish News |date=May 8, 2008}}</ref> Peizer graduated with an undergraduate B.S. in Economics from the [[Wharton School of the University of Pennsylvania]].<ref name="auto7"/><ref name="Reuters" /><ref>{{Cite web|url=https://archives.upenn.edu/wp-content/uploads/2018/04/commencement-program-1982.pdf|title=University of Pennsylvania Two Hundred and Twenty-Sixth Commencement for the Conferring of Degrees|publisher=University of Pennsylvania}}</ref> He resides in [[Dorado]], [[Puerto Rico]] and [[Santa Monica, California]].<ref name="auto5"/><ref>{{Cite web|url=https://www.sec.gov/Archives/edgar/data/1136174/000162828023030794/otrks-1amendmentno2x082023.htm|title=AMENDMENT NO. 2 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; ONTRAK, INC.|website=Securities and Exchange Commission}}</ref>


== Early career ==
== Career ==
===Early years; Drexel, and immunity to testify against Milken===
In 1980, at just 20 years old, Peizer was recruited by Robert Rubin of Goldman Sachs from the Wharton School at the University of Pennsylvania and was believed to be the youngest associate during that era. In 1983 he was recruited by First Boston, where Peizer instantly became the most profitable high yield bond trader. He was occasionally referred to as the "Michael Milken of the East Coast", as he provided Drexel Burnham Lambert clients with an alternative to the Milken controlled High Yield Bond market. During his time at First Boston, Peizer led the first financing for a little known reverse merger company, Danaher Inc. Today Danaher is one of America's largest industrial companies. Peizer's most notable work while at First Boston came in 1984 when Peizerled the restructuring and financing of Ted Turner's insolvent Turner Broadcasting Corporation which specifically capitalized Turner Broadcasting Corp's CNN and WTBS Super Station with $185 Million; thereby saving it from bankruptcy.
Out of college in 1983, Peizer worked for a few months at [[Goldman Sachs]] when he was 21 years old.<ref name="auto6">{{Cite web|url=https://www.ft.com/content/0a74de62-2758-4590-9c1f-6d18aef8f6d4|title=One-time Milken associate now at centre of novel insider trading case; US authorities accuse investor of violating rules on stock sales plans for corporate executives|date=March 20, 2023|work=The Financial Times|author=Sujeet Indap}}</ref><ref name="Reuters">{{Cite news |title=Catasys Inc (CATS.OQ) |work=Reuters |url=https://in.reuters.com/finance/stocks/company-officers/CATS.OQ |access-date=November 25, 2020}}{{dead link|date=September 2024|bot=medic}}{{cbignore|bot=medic}}</ref> Later that year he worked for a stint at [[First Boston]] as a [[high yield bond]] salesman.<ref name="auto6"/>


[[Michael Milken]] hired Peizer as a [[junk bond]] salesman at [[Drexel Burnham Lambert]] in 1985.<ref name="auto2"/><ref>{{Cite web|url=https://www.tampabay.com/archive/1990/10/20/dow-up-again/|title=Dow Up Again|website=Tampa Bay Times|date= October 20, 1990}}</ref> His job was to manage the Drexel account of the president of high-yield mutual fund manager Solomon Asset Management, with whom Drexel had an illegal arrangement that included insider trading and phony tax losses.<ref>{{cite web | url=https://books.google.com/books?id=z-gCAAAAMBAJ&dq=Terren+Peizer&pg=PA45 | title=The Insider|work=New York Magazine | date=September 16, 1991 }}</ref><ref>{{Cite book|url=https://books.google.com/books?id=a9_Z413-J1IC&dq=Terren+Peizer+%22first+boston%22&pg=PA258|title=Den of Thieves|first=James B.|last=Stewart|date=2012|publisher=Simon and Schuster|isbn=9781439126202}}</ref><ref>{{Cite web|url=https://www.nytimes.com/1990/11/28/business/witness-against-milken-settles-sec-charges.html|title=Witness Against Milken Settles S.E.C. Charges|first=Kurt|last=Eichenwald|date=November 28, 1990|work=The New York Times}}</ref><ref name="LATimes Shadow" /><ref name="auto3">David A. Vise (September 12, 1989). [https://www.washingtonpost.com/archive/business/1989/09/12/new-charges-against-milken-expected/d86dabac-98f1-4a91-a2a4-628b939860c5/ "New Charges against Milken Expected"], ''The Washington Post''.</ref><ref>{{cite book |last=Kornbluth|first=Jesse|title=Highly confident: The Crime and Punishment of Michael Milken|page=213|year=1992|publisher=[[William Morrow and Co.]]}}</ref> Peizer worked directly under (and at the same desk as) Milken and admired him, sometimes pretending to be him on the phone, and calling him "Dad".<ref>{{cite book|url=https://books.google.com/books?id=2xclCwAAQBAJ&q=dancing%20at%20the%20predator's%20ball%20peizer&pg=PA143|title=Hit & Run: How Jon Peters and Peter Guber Took Sony for a Ride in Hollywood|isbn=9781439128046|last1=Griffin|first1=Nancy|last2=Masters|first2=Kim|date= 2016|publisher=Simon and Schuster }}</ref>
In the spring of 1985,in an effort to remove the competition from the marketplace, Michael Milken recruited the young Peizer as a Senior Vice President of Drexel Burnham Lambert. Michael Milken immediately anointed Peizer as his "Protege and Lefthand Man," <ref>Forbes, September 6,1999 " War of the Milkenites" page 54-54 by: Seth Lubove</ref> as they shared clients, desk and phone before taking over all of Milken's direct client responsibilities, which made Peizer the most productive in the High Yield Bond department.


When investigations into Milken's illegal activities began, Peizer starting in 1988 provided material evidence to prosecutors against Milken and Solomon.<ref>[https://www.sechistorical.org/collection/papers/1980/1989_0413_USBoeskySupplemental.pdf "DEFENDANT' S SUPPLEMENTAL MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR REDUCTION OF SENTENCE Pursuant to Rule 35(b)"], ''US v. Boesky'', United States District Court for the Southern District of New York, April 13, 1989.</ref> At Milken's pre-sentencing hearing for [[securities fraud]] in 1990, Peizer testified against Milken in exchange for [[Legal immunity|immunity]] from both [[criminal prosecution]] and [[U.S. Securities and Exchange Commission|SEC]] sanctions.<ref name="NYT4thImmunity"/><ref>{{Cite book|url=https://books.google.com/books?id=gm5QDwAAQBAJ&dq=%22milken%22+%22peizer%22&pg=PA11|title=Banking on Fraud: Drexel, Junk Bonds, and Buyouts|first=Mary|last=Zey|date=September 29, 2017|publisher=Routledge|isbn=9781351314831}}</ref><ref name="auto3"/><ref name="auto2"/><ref name="auto6"/> Milken pled guilty and served nearly two years in prison.<ref name="auto22"/><ref>{{Cite web|url=https://www.ft.com/content/0a74de62-2758-4590-9c1f-6d18aef8f6d4|title=One-time Milken associate now at centre of novel insider trading case|website=www.ft.com}}</ref>
In 1990, after being laid off with 5,300 other Drexel employees in the midst of Drexel's liquidation Peizer purchased a minor league basketball team, the Omaha Racers. After his purchase, the Racers won the CBA Championship and Peizer took that opportunity to sell the team.


===Investor and executive in small-cap companies===
With "Peizer's reputation as one of Milken's sharp-elbowed traders preceding him,"<ref>Forbes, September 6,1999 " War of the Milkenites" page 54-54 by: Seth Lubove</ref> Peizer then started his investment company Beachwood Financial and Wendover Financial Corporation before teaming up with Neil Cole. Peizer and Cole went on to capitalize the company Candies, which is the predecessor to today's multi-billion dollar Iconix Brand Group. During Peizer's early investment career, his function for many of these smaller and development stage companies was once described as "lender of almost last resort"<ref>http://articles.latimes.com/1994-07-31/business/fi-22082_1_high-rollers</ref> but Peizer's investment savvy empowered him to get favorable deals with these companies still in their early developmental stages.
After Drexel, Peizer became a private investor in a series of small companies.<ref name="auto2"/>


====1989–2000====
From 1999 through 2002 Peizer was Chairman of the Board of industry leading supercomputer designer and builder Cray, Inc., a Nasdaq Global Market company, and remains its largest beneficial stockholder <ref>Forbes Profile</ref>. In August 2006, Peizer founded and served as Chairman of the Board of Xcorporeal,Inc., a developer of wearable artificial kidneys, where he presided over the licensing of substantially all of the companies technology to the Dialysis Industry's dominant services provider Fresenius Medical Care for a substantial up front payment and ongoing licensing royalties.<ref>http://www.nejm.org/doi/pdf/10.1056/NEJMsa1502403</ref> Many of these companies, including Cray, Hythiam and Xcorporeal became public companies during Peizer's tenure.
In 1989 Peizer purchased the [[Omaha Racers]], a minor league basketball team, but it struggled financially.<ref>{{cite news |title=Omaha CBA team sold to Los Angeles banker |url=https://www.newspapers.com/clip/15283269/the-lincoln-star/ |accessdate=August 11, 2020 |work=The Lincoln Star |date=September 7, 1989 |page=18}}</ref> He sold the team the following year.<ref>{{Cite web|url=https://i80sportsblog.com/cba-basketball-from-the-horses-mouth-steve-idelman-omaha-racers/|title=CBA Basketball From The Horse's Mouth - Steve Idelman On The Omaha Racers|first=Paul|last=Eide|date=September 6, 2020}}</ref>


In 1991 he gained control of plastics company '''UTI Chemicals Inc.''', which had 26 employees, and became its president for a salary of $100,000; the company had a loss of over three million dollars each of the following two years.<ref>Elizabeth Walsh (2016). [https://books.google.com/books?id=ZbBkDAAAQBAJ&dq=%22peizer%22+%22uti+chemicals%22&pg=PA1800 ''The Corporate Directory of US Public Companies 1995''].</ref><ref name="LATimes Drexel Figure">{{Cite news |last=Michaud |first=Anne |date=April 10, 1991 |title=Drexel Figure Gains Control of UTI Chemicals |language=en-US |work=The Los Angeles Times |url=https://www.latimes.com/archives/la-xpm-1991-04-10-fi-357-story.html |access-date=November 25, 2020}}</ref> He stepped down as its chairman in 1994.<ref name="Jim Orefice">{{Cite news |date=February 7, 1994 |title=Jim Orefice has been appointed chairman... |language=en-US |work=The Los Angeles Times |url=https://www.latimes.com/archives/la-xpm-1994-02-07-fi-20114-story.html |access-date=November 26, 2020}}</ref>
Peizer's investment philosophy was taking shape during these years, which according to Peizer, was to "Invest in situations where you tip the playing field in your favor and Invest in companies with low market caps but with the ability to change the way its industry does things."<ref>Taub, Stephen. “From rats to riches.” Financial World, Apr 26, 1994</ref> Peizer applied his financial acumen and structuring expertise to minimize his investment at risk, but allow for exponential returns. This philosophy has served Peizer well, and it also points to his founding of Hythiam and Xcorporeal. Peizer has often stated his hopes that the two companies will change the addiction treatment and kidney dialysis industries, respectively.


In June 1991 Peizer purchased $3.5 million of [[convertible debenture]]s from '''Candies, Inc.''' (formerly known as '''Millfeld Trading Co.'''; a shoe importing and marketing business), and became a director of the company.<ref name="auto16">{{Cite web|url=https://casetext.com/case/food-allied-serv-v-millfeld|title=''Food Allied Serv. v. Millfeld'', 841 F. Supp. 1386|website=United States District Court, S.D. New York|date=January 5, 1994}}</ref><ref>[https://books.google.com/books?id=5Ltd1hu4G4wC&dq=%22terren%22+%22peizer%22+%22millfield%22&pg=PA154 ''Official Summary of Security Transactions and Holdings Reported to the Securities and Exchange Commission Under the Securities Exchange Act of 1934 and the Public Utility Holding Company Act of 1935''], Volume 57, Issues 9-10, U.S. Securities and Exchange Commission.</ref> He had by that time already purchased 135,000 shares of the company's common stock, and when he became a director he received [[Warrant (finance)|warrant]]s to purchase 1.1 million shares of the company's common stock at $10.00 per share.<ref name="auto16"/><ref name="auto2"/> Peizer divested himself of over 90% of his stock in the company on September 23, 1991, one day before the company publicly acknowledged that it had materially underpaid its [[United States Customs Service|customs obligation]]s and faced a $1.6 million liability.<ref name="auto16"/> In early 1992, the price of the company stock collapsed after the company disclosed that it was being investigated by federal prosecutors for systematic underpayment of its [[customs duties]], and Peizer thereafter resigned as a director.<ref name="auto16"/>
==Major Deals and Financial Transactions==


Peizer purchased an interest of over 50% in '''Urethane Technologies''', a small-cap company which manufactured and sold a bicycle tire that it claimed would not go flat, and named himself Chairman.<ref name="auto12"/><ref>[https://books.google.com/books?id=ApGZwrQOBf0C&dq=%22Urethane%22+Technologies+%22peizer%22+%22terren%22&pg=PA613 ''Official Summary of Security Transactions and Holdings Reported to the Securities and Exchange Commission Under the Securities Exchange Act of 1934 and the Public Utility Holding Company Act of 1935''], Volume 60, Issue 5, United States Securities and Exchange Commission, 1994.</ref> He sold his shares in 1993 at what was reported to be a $6 million profit, and the company never delivered, lost money, and went bankrupt in 1997.<ref name="auto12"/><ref name="auto14">{{Cite web|url=http://www.nbcnews.com/health/health-news/unproven-meth-cocaine-remedy-hits-market-flna1C9444547|title=Unproven meth, cocaine 'remedy' hits market|website=NBC News|date=February 5, 2007|author= Kari Huus}}</ref>
Although there have been no recent attempts to estimate Peizer's wealth, the Los Angeles Times confirmed his net worth at $50 million back in 1994<ref>http://articles.latimes.com/1994-07-31/business/fi-22082_1_high-rollers</ref>. While discussing the unusual step of Peizer investing his own personal net worth in some investment deals, the paper stated that he "avoids the usual accoutrements of wealth, such as big houses and expensive cars." The reporter also noted that "Peizer still lives in the condo he bought nine years ago, when he came west to sit at Milken's left hand."<ref>Forbes, September 6,1999 " War of the Milkenites" page 54-54 by: Seth Lubove</ref>


In 1993 he acquired a 37% share of now-defunct computer parts producer [[CMS Enhancements]]. He was elected chairman of the company, and held the position for two years.<ref>{{cite web|url=https://www.latimes.com/archives/la-xpm-1993-12-10-fi-835-story.html|title=CMS Enhancements Names New Top Management Team|newspaper=LA Times|date=December 10, 1993|author=James M. Gomez }}</ref>
However, despite his modest surroundings, Peizer has been involved in some of the top U.S. financial transactions. For instance, while at Drexel, Peizer was involved in financing some of the largest multi-billion dollar corporate takeovers of the 1980s, including Ted Turner's purchase of MGM/UA Entertainment Co.and the buyout of Beatrice foods, Storer Cable,and RJR Nabisco. Peizer and his clients also led the financings of America's most innovative and pioneering companies<ref>Taub, Stephen. “From rats to riches.” Financial World, Apr 26, 1994</ref>. This is best exemplified by the capitalizing of McCaw Cellular, the nation's first national cell phone carrier, which later became AT&T Cellular. Peizer and his clients led financings for such well known Industrialists as: Ron Perlman, John Malone, Carl Icahn, Ted Turner, Nelson Peltz and Rupert Murdoch. Peizer and his clients also financed many of the early buyouts of LBO pioneers KKR, Blackstone Group and The Carlyle Group. On the heels of the Turner/MGM/UA deal, Peizer became a magnet for entertainment deals and financings. One such deal, chronicled in the book "Hit and Run,"<ref>Google Books, Hit&Run</ref> married Peter Gruber and John Peter's, Guber Peter's & Co. with Burt Surgarman's Barris Industries. Motivated by Barris' $100 million cash hoard, Peizer merged the two companies, which then were immediately parleyed into Sony Pictures.


In the mid-1990s Peizer played a role in now-defunct [[Towers Financial Corporation]]. The company was a [[debt collection]] agency [[Ponzi scheme]] founded by fraudster [[Steven Hoffenberg]], with which [[Jeffrey Epstein]] was involved.<ref name="auto2"/><ref>{{Cite web|url=https://www.nytimes.com/1995/07/20/business/creditors-in-a-big-ponzi-scheme-say-they-ve-been-taken-again.html|title=Creditors in a Big Ponzi Scheme Say They've Been Taken Again|first=Diana B.|last=Henriques|date=July 20, 1995|work=The New York Times}}</ref><ref>{{Cite web|url=https://books.google.com/books?id=FQk-AQAAIAAJ&q=%22peizer%22+%22towers+financial%22|title=Broker-dealer Litigation ... Annual Survey|date=March 28, 1999|publisher=[[American Bar Association]], Litigation Section}}</ref>
Peizer surprised the financial markets when he successfully outbid Billionaire Alec Gores Technology Group in a takeover bid for Cray Research (now Cray, Inc.) by the much smaller Peizer-controlled, Tera Computer Co. Tera issued cash, stock and notes to purchase the once-struggling supercomputer company from Silicon Graphics. Over the years, Cray has developed many of the supercomputers used by the U.S. defense and intelligence communities, pharmaceutical, aerospace, oil drilling and weather and seismic industries. Within two years of Peizer's acquisition, Cray's market capitalization grew from $25 million to $1.3 Billion. His departure would have a profound effect as Peizer became vitally integral to the companies and developed an investor following. When a press release in 1999 "announced his "resignation" claiming his "objectives have been achieved," the stock dropped 16% on the day of the announcement. The stock has drifted further south to $13.50, off 47% from its 52-week high, from Peizer's resignation."


Peizer purchased an interest in '''Advanced Promotion Technologies''', which manufactured electronic barcode coupon machines for checkout lines.<ref name="auto12"/> He subsequently sold his shares, and the company then went bankrupt in 1996.<ref name="auto12"/>
==Prometa citicism==


From 1997 to 1999, Peizer was president of '''Hollis-Eden''', a startup pharmaceutical company.<ref name="auto2"/><ref name="auto12"/><ref name="auto1">{{Cite web|url=https://g.foolcdn.com/dtrouble/1999/dtrouble990611.htm|title=Hollis-Eden Pharmaceuticals (Daily Trouble) |date=June 11, 1999|website=Fool.com|author=Louis Corrigan}}</ref> ''[[The New York Times]]'' covered the company and his involvement in it in an article entitled: "No Sales, but Watch the Stock Soar".<ref name="auto2"/> By 1998 the company still had no sales or earnings.<ref name="auto2"/> That year Peizer said: "This is a once in a lifetime opportunity for me. We have something special."<ref name="auto14"/> Peizer resigned from the company in March 1999 concurrently with the dismissal of its CEO [[Richard B. Hollis]] [[for cause]].<ref name="auto12"/><ref name="auto2">{{cite news|url=https://www.nytimes.com/1998/02/17/business/market-place-no-sales-but-watch-the-stock-soar.html|title=Market Place; No Sales, but Watch the Stock Soar|newspaper=The New York Times|date=February 17, 1998 |last1=Eaton |first1=Leslie }}</ref><ref name="auto1"/> By September 1999 the company's stock was at $13.50, 47% lower than its 52-week high.<ref name="auto13"/>
It was Peizer’s half brother's struggle with addiction that spurred him to found the Prometa treatment program in 2003 and launch Hythiam,Inc.in 2004. Peizer capitalized the company with in excess of $170 million in capital.<ref>Ramshaw, Emily (January 20, 2008). "Texas' Prometa program for treating meth addicts draws skeptics".</ref><ref>"Prescription For Addiction". 60 Minutes (CBS News). December 9, 2007. http://www.cbsnews.com/stories/2007/12/07/60minutes/main3590535.shtml</ref>. Prometa combines three medications as a treatment for substance dependence, which became known as the Prometa Treatment Protocol. The medications involved are all FDA approved.<ref>Ramshaw, Emily (January 20, 2008). "Texas' Prometa program for treating meth addicts draws skeptics". Dallas Morning News. </ref> Combining them for addiction treatment is different from the purposes for which they were individually approved. This is known as prescribing medications for "Off-label" use. More then 31 percent of all prescriptions prescribed by physicians are written for " off-label" use.<ref>see wikipedia-" Off-label " use-</ref>


In 1999 Peizer raised money for and invested in '''Tera Computer Company''', an unprofitable 112-employee manufacturer of supercomputers.<ref>[https://www.edn.com/tera-gets-finance-facelift/ "Tera Gets Finance Facelift,"] EDN, July 12, 1999.</ref><ref>[https://www.bizjournals.com/seattle/stories/1999/06/21/daily5.html "Tera lands $30M in financing,"] ''Puget Sound Business Journal'', June 22, 1999.</ref> The money that was raised allowed Tera to later buy the remains of [[Cray Research]], and Peizer was its chairman and a director from 1999 to 2000.<ref>{{Cite web|url=https://labusinessjournal.com/news/buyout-la-financier-reemerges-as-key-player-in/|title=BUYOUT-L.A. Financier Reemerges as Key Player in Cray Deal|date=March 5, 2000|work=Los Angeles Business Journal}}</ref><ref>{{Cite web|url=https://www.forbes.com/forbes/2000/0403/6508060a.html|date=April 3, 2000|title=Megaflop|website=Forbes}}</ref><ref>{{Cite web|url=https://www.hpcwire.com/1999/07/02/people-and-positions-tera-elects-new-chairmain-sgi-names-new-sales-mktg-vp-emc-appts-new-vp-global-mktg/|title=People and Positions: Tera Elects New Chairmain. SGI Names New Sales/Mktg VP. EMC Appts New VP, Global Mktg.|first=John|last=Shandor|date=July 2, 1999|website=HPCwire}}</ref><ref>{{cite web|url=https://labusinessjournal.com/news/2000/mar/06/buyout-la-financier-reemerges-as-key-player-in/|title=L.A. Financier Reemerges as Key Player in Cray Deal|newspaper=Los Angeles Business Journal|date=March 5, 2000 }}</ref> He stepped down as chairman in 2000.<ref name="WSJ"/> Tera said the reason was that Peizer would otherwise have been required to obtain a [[security clearance]] from the [[US Department of Defense]] by the end of 2000 to transfer Cray's classified government business to Tera by then, and Tera did not think that would happen.<ref name="WSJ">{{Cite news |date=December 26, 2000 |title=Technology Briefs |language=en-US |work=The Wall Street Journal |url=https://www.wsj.com/articles/SB977801943712445761 |access-date=November 25, 2020 |issn=0099-9660}}</ref>
Peizer was successful in getting Hythiam listed on the NASDAQ Global Market Exchange, using a technique Peizer has used many times before and has become Wall Street's leader in: the reverse merger or reverse public offering (RPO). Hythiam's treatment went on to help thousands of patients end their dependence and get better. Peizer and Hythiam caught the addiction industry's eye for not waiting until there was enough scientific "proof" that Hythiam's treatment was truly effective. Subsequent studies have since validated Hythiam's and Peizer's claims.<ref>http://hythiam.com/CompletedStudies.htm</ref> In July of 2010, Hythiam and Peizer gained their first heath plan customer (Health Plan of Nevada,Inc. ), joining Ford Motor Company and the United Auto Workers in its adoption of Hythiam's Catasys Integrated Substance Dependence Treatment Solution. Peizer still envisions Hythiam's treatment methodology being deployed throughout the nation.


====2001–present====
Hythiam gained some notice for its 2006 ad campaign featuring deceased comedian Chris Farley, with the slogan, "It wasn't all his fault" (alluding to his death from a drug overdose). The company paid $25,000 to Farley's estate in order to use his image.<ref>"Farley’s photo to be used on drug treatment ads: Family gives approval to use image of star who died of overdose". Associated Press. April 1, 2006. </ref> This advertisement campaign garnered national attention, as Peizer became a fixture on the American news circuit, regularly appearing on national news syndicates such as Fox News, CNN, Good Morning America, The Today Show, and CNBC's Squawk Box and Mad Money. Despite questions about its tastefulness and criticism from addiction treatment providers for advertising direct to consumers, Peizer defended the campaign as "creating awareness" about addiction as a medical disease, not a social and psychological personality disorder.
In 2004 Peizer founded '''Hythiam Inc.''', a tiny pharmaceutical company, from which in 2006 when he was majority shareholder he received $1.3 million in compensation.<ref>{{Cite web|url=http://www.treatmentmagazine.com/component/content/article/7-newswires/99-hythiam-svp-lamacchia-latest-in-long-string-of-company-layoffs.html|title=Hythiam EVP Lamacchia in long string of company layoffs|work= Treatment Magazine|date=November 21, 2019|archive-url=https://web.archive.org/web/20191121131429/http://www.treatmentmagazine.com/component/content/article/7-newswires/99-hythiam-svp-lamacchia-latest-in-long-string-of-company-layoffs.html |archive-date=November 21, 2019 }}</ref><ref name="auto13">{{Cite web|url=https://www.wsj.com/articles/SB113115427427989094|title=Curb Your Cravings For This Stock|first=Bill|last=Alpert|website=The Wall Street Journal|date=November 7, 2005}}</ref><ref name="Bartholomew">{{cite news |last1=Bartholomew |first1=Dana |title=Catasys Thrives on Data Dives |url=https://labusinessjournal.com/news/2018/dec/07/catasys-thrives-data-dives/ |accessdate=August 12, 2020 |work=Los Angeles Business Journal |date=December 7, 2018}}</ref> The firm bought the rights to an ineffective addiction treatment, and marketed it.<ref name="Barrons Curb">{{Cite news |last=Alpert |first=Bill |title=Curb Your Cravings For This Stock |language=en-US |work=Barrons |url=https://www.wsj.com/articles/SB113115427427989094 |access-date=November 26, 2020}}</ref> Despite the fact that no [[Placebo-controlled study|placebo-controlled]] or [[double-blind]] study or [[Scholarly peer review|peer-reviewed publication]] of its "[[Prometa]]" (the marketing name for Gabasync) approach had been undertaken, and although no [[FDA approval]] had been obtained, Hythiam advertised the "innovative, medically based treatment" (which could cost $15,000 per patient) and franchised doctors to use Prometa, in exchange for a per-patient fee.<ref name="auto15">{{Cite web|url=https://www.cbsnews.com/news/prescription-for-addiction/|title=Prescription For Addiction|website=CBS News|date=December 7, 2007}}</ref><ref name="auto13"/> ''[[Barron's (newspaper)|Barrons]]'', in a November 2005 article entitled "Curb Your Cravings For This Stock", wrote "If the venture works out for patients and the investing public, it'll be a rare success for Peizer, who's promoted a series of disappointing small-cap medical or technology stocks ... since his days at Drexel".<ref name="auto13"/> Peizer said: "Hythiam is my biggest triumph. If it's the only thing I did, then my life would have been a tremendous success."<ref name=cleve/> Journalist [[Scott Pelley]] said to him in 2007: "Depending on who you talk to, you're either a revolutionary or a [[snake oil salesman]]."<ref name="auto15"/> ''[[60 Minutes]]'', ''[[NBC News]]'', and ''[[The Dallas Morning News]]'' criticized Peizer after the company bypassed [[clinical studies]] and government approval when bringing to market Prometa; the addiction drug proved to be completely ineffective.<ref name="auto14"/><ref>{{Cite web|url=http://washingtonmonthly.com/2012/01/24/the-rise-and-fall-of-a-miracle-cure-for-drug-addiction/|title=The Rise and Fall of a "Miracle Cure" for Drug Addiction|first=Keith|last=Humphreys|date=January 24, 2012|work=Washington Monthly}}</ref><ref name="60 Minutes">{{Cite news |date=December 9, 2007 |title=Prescription For Addiction |work=60 Minutes |publisher=CBS News |url=https://www.cbsnews.com/news/prescription-for-addiction/ |access-date=August 22, 2008 |url-status=live |archive-url=https://web.archive.org/web/20071231045158/http://www.cbsnews.com/stories/2007/12/07/60minutes/main3590535.shtml |archive-date=December 31, 2007}}</ref><ref name="Dallas">{{Cite news |last=Ramshaw |first=Emily |date=January 20, 2008 |title=Texas' Prometa program for treating meth addicts draws skeptics |work=Dallas Morning News |url=https://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/012108dntexprometa.2c2f801.html |archive-url=https://web.archive.org/web/20101027101333/https://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/012108dntexprometa.2c2f801.html |archive-date=October 27, 2010}}</ref> Journalist [[Adam Feuerstein]] opined: "most of what Peizer says is dubious-sounding hype".<ref>[[Adam Feuerstein]] (November 13, 2007). [https://www.thestreet.com/investing/stocks/biotech-notebook-hythiam-shire-genentech-10389850 "Biotech Notebook: Hythiam, Shire, Genentech; Talk is proving cheap at Hythiam,"] ''TheStreet''.</ref> In June 2008, Hythiam had generated a net loss each year for 5 straight years, and while its stock had traded at $61.26 a share in 2007, it traded at $0.18 per share three years later (a 99.7% drop).<ref name="auto10">{{Cite web|url=https://www.prisonlegalnews.org/news/2008/jun/15/junk-bonds-to-junk-science-drug-treatment-program-questioned/|title=Junk Bonds to Junk Science? Drug Treatment Program Questioned |website=Prison Legal News|date=June 15, 2008}}</ref><ref>{{Cite web|url=https://www.google.com/search?q=Hythiam+stock+price|title=Hythiam stock price|website=}}</ref><ref>{{Cite web |title=Percentage Calculator |url=https://www.thecalculator.website/percentage-calculator |access-date=April 25, 2024 |website=The Calculator Website |language=en}}</ref> According to independent investment research firm [[Morningstar, Inc.|Morningstar]]: "Over the long haul, this company has posted some of its industry's worst returns on assets."<ref name="auto10"/>
Other critics focused on the company's emphasis on sales over research that would establish the validity of Prometa, especially since the FDA restricts marketing of drugs to the purpose for which they have been approved. Peizer justified the company's approach in a 60 Minutes episode as providing information about the treatment protocol to physicians, since Hythiam does not market the medications directly to consumers. The physicians in the practice of medicine, then prescribe the medications to the patients in need.[11]The FDA allows physicians to prescribe all FDA approved medications off label in the practice of medicine. Addiction experts marveled that Peizer was exploiting a nuance and "loophole."

In 2018, Peizer became CEO and chairman of '''BioVie''', a pharmaceutical company of which he was majority shareholder (his ownership was 88% as of June 2021).<ref name="auto17">Jim Halley (March 2, 2023). [https://www.nasdaq.com/articles/why-shares-of-biovie-jumped-51.7-in-february "Why Shares of BioVie Jumped 51.7% in February,"] NASDAQ.</ref><ref>{{Cite web|url=https://fintel.io/so/us/bivi/peizer-terren-s|title=Peizer Terren S ownership in BIVI / BioVie Inc - 13F, 13D, 13G Filings|website=Fintel.io}}</ref> In 2021 the company entered into an agreement to buy a product from another company he controlled, NeurMedix, for up to $10 million and over 8 million BioVie shares; that led to a 15% share price drop in one day to $18.30 a share, and in April 2023 the company's share price was down to $8.08.<ref>{{Cite web|url=https://contracts.justia.com/companies/biovie-inc-4531/contract/268330/|title=Amendment No. 2 to Asset Purchase Agreement, dated January 13, 2023, by and between BioVie Inc. and Acuitas Group Holdings, LLC, and Acuitas Group Holdings, LLC, solely for purposes of Section 10.16 of the Agreement &#124; BIOVIE INC.|website=Justia}}</ref><ref>{{Cite web|url=https://www.investorsobserver.com/news/stock-update/biovie-bivi-stock-drops-after-finalizing-asset-purchase-agreement-with-neurmedix-inc|title=BioVie (BIVI) Stock Drops After Finalizing Asset Purchase Agreement With NeurMedix, Inc.|date=April 28, 2021 |author= Carl Pettit |website=Investors Observer}}</ref><ref>{{Cite web|url=https://www.investorsobserver.com/symbols/bivi|title=BIVI Stock Analysis: Price, Forecast, and News|website=Investors Observer}}</ref> He resigned on March 2, 2023, the day after he was criminally indicted, at which point the company had not yet received any revenue, and had lost $26 million in 2022.<ref name="SPGlobal">{{Cite news |last=Iral |first=Vince |date=July 4, 2018 |title=BioVie sells stock, warrants to Acuitas, names CEO |language=en-us |work=S&P Global |url=https://www.spglobal.com/marketintelligence/en/news-insights/trending/y_o_oHF3J2IzKQBfejNCIg2 |access-date=November 25, 2020}}</ref><ref name="auto17"/>

In March 2021 Peizer became the controlling shareholder and board Executive Chairman of '''EVmo''', a technology-enabled [[fleet management]] and rental company, which had a share price of $5.45 the prior month.<ref name="auto11">{{Cite web|url=https://www.google.com/search?q=evmo+price+history|title=EVmo price history|website=}}</ref><ref name="auto8">{{Cite web|url=https://www.axios.com/pro/climate-deals/2023/02/17/evmo-board-director-terren-peizer-resigns-loan-default|title=EVmo loses its board chairman amid loan default|first=Megan|last=Hernbroth|date=February 17, 2023|website=Axios}}</ref><ref name="auto9">{{Cite press release|url=https://www.globenewswire.com/fr/news-release/2021/03/03/2186243/0/en/EVmo-Inc-Formerly-YayYo-Inc-Announces-that-Acuitas-Group-Holdings-LLC-has-closed-the-transaction-with-X-LLC-and-has-become-the-Largest-and-Controlling-Stockholder-in-the-Company.html|title=EVmo, Inc., Formerly YayYo, Inc., Announces that Acuitas Group Holdings, LLC, has closed the transaction with, X, LLC and has become the Largest and Controlling Stockholder in the Company|date=March 3, 2021|website=GlobeNewswire News Room}}</ref> He resigned as EVmo Chairman on February 17, 2023, as the company [[Default (finance)|defaulted]] on a $7.5 million loan, and its stock price had declined to $0.17 per share.<ref name="auto8"/><ref name="auto9"/><ref name="auto11"/>

He is the founder and CEO of '''Acuitas Group Holdings''' (of which he is the sole shareholder), biotech company '''NeurMedix''' (of which he was the sole shareholder, and which in 2021 made a multi-million dollar sale to BioVie, of which Peizer was CEO), and blockchain company '''Casperlabs'''.<ref name="Reuters" /><ref>{{Cite web|url=https://www.biospace.com/article/biovie-acquires-biopharma-assets-from-privately-held-neurmedix/|title=BioVie Acquires Biopharma Assets from Privately Held NeurMedix|website=BioSpace|date=April 27, 2021}}</ref>

===Ontrak; Indictment and conviction===

Until his 2023 indictment, he was CEO and chairman of '''Catasys, Inc.''' (later renamed '''Ontrak Inc.'''), a publicly traded healthcare company that he had founded in 2003.<ref>{{Cite web|url=https://www.lexology.com/library/detail.aspx?g=d852e2cb-3338-435f-8475-8a9d1120b2ec|title=DOJ and SEC bring charges for insider trading and fraudulent scheme using purported 10b5-1 plans|first=Cydney S.|last=Posner|date=March 6, 2023|website=Lexology}}</ref><ref name="auto6"/><ref name="auto18">{{Cite web|url=https://www.businesswire.com/news/home/20200706005545/en/Catasys-Inc.-is-now-Ontrak-Inc.|title=Catasys, Inc. is now Ontrak, Inc.|website=Business Wire|date=July 6, 2020}}</ref> Peizer was also Ontrak’s biggest shareholder.<ref name="auto23"/> His 2018 compensation at the company was $2.4 million, over twice that of CEOs of similar companies.<ref name="auto21">{{Cite web|url=https://finance.yahoo.com/news/catasys-inc-nasdaq-cats-ceo-114545120.html|title=Is Catasys, Inc.'s (NASDAQ:CATS) CEO Overpaid Relative To Its Peers?|website=Yahoo Finance|date=January 14, 2020}}</ref>

On March 1, 2023, after an [[FBI]] investigation, Peizer was charged with [[insider trading]] by the SEC, which alleged that he sold $20 million of Ontrak Inc. stock in 2021 while he was in possession of material nonpublic negative information related to the company's largest customer.<ref>{{Cite web|url=https://www.justice.gov/opa/pr/chairman-publicly-traded-health-care-company-convicted-insider-trading|title=Office of Public Affairs &#124; Chairman of Publicly Traded Health Care Company Convicted of Insider Trading &#124; United States Department of Justice|date=June 21, 2024|website=www.justice.gov}}</ref><ref name="auto18"/><ref name="auto">{{Cite web|url=https://www.sec.gov/news/press-release/2023-42|title= SEC Charges Ontrak Chairman Terren Peizer With Insider Trading; Healthcare executive avoided more than $12 Million in losses by selling shares through Rule 10b5-1 trading plans before stock freefall|website=SEC.gov|date= March 1, 2023}}</ref><ref>{{Cite web|url=https://www.jdsupra.com/legalnews/client-alert-doj-and-sec-used-data-3325885/|author=Sara Cervantes, Brandon Fox, Charles Riely|title=Client Alert: DOJ and SEC Used Data Analytics to Target Insider Trading with 10b5-1 Plans|website=JD Supra|date=March 15, 2023}}</ref> Ontrak shares, which had traded at $85.21 in February 2021, were trading at under $1.00 since July 2022.<ref name="auto6"/><ref>{{Cite web|url=https://www.google.com/search?q=ontrak+share+price|title=Ontrak share price|website=}}</ref> In addition, the [[U.S. Department of Justice]] announced [[criminal charge]]s of insider trading and securities fraud against Peizer, charging that thereby he had avoided $12 million in losses; Peizer was arrested.<ref name="auto5"/><ref name="auto"/><ref name="auto6" /><ref>{{Cite web|url=https://www.justice.gov/opa/speech/assistant-attorney-general-kenneth-polite-jr-delivers-keynote-aba-s-38th-annual-national|author=[[Kenneth Polite|Kenneth A. Polite, Jr.]]|title=Assistant Attorney General Kenneth A. Polite, Jr. Delivers Keynote at the ABA's 38th Annual National Institute on White Collar Crime|date=March 3, 2023|website=The United States Department of Justice}}</ref> His case was assigned to the [[U.S. District Court for the Central District of California]], before U.S. District Judge [[Dale S. Fischer]].<ref name="auto5"/>

On March 2, 2023, he resigned as Ontrak CEO and Chairman.<ref name="auto4"/> On January 31, 2024, a superseding indictment was filed, charging Peizer with additional counts of securities fraud and insider trading.<ref name="auto19">{{Cite web|url=https://www.justice.gov/criminal/criminal-vns/case/united-states-v-terren-s-peizer|title=Criminal Division &#124; United States v. Terren S. Peizer |date=March 1, 2023|website=United States Department of Justice}}</ref> On February 9, 2024, Peizer moved to dismiss the indictment.<ref name="auto20">{{Cite web|url=https://www.natlawreview.com/article/dojs-first-10b5-1-plan-prosecution-survives-motion-dismiss|title=DOJ 10b5 1 Plan Prosecution Makes It Past Motion to Dismiss|website=National Law Review}}</ref> On March 7, 2024, Judge Fischer denied Peizer’s motion to dismiss, holding that the government had alleged facts sufficient to give rise to a charge of insider trading.<ref name="auto20"/> Trial was set for June 4, 2024.<ref name="auto19"/>

On June 21, 2024, he was convicted and found guilty by a Los Angeles, California, federal jury of three counts of insider trading and securities fraud, following a nine-day trial.<ref name="auto23"/> Peizer was slated to be sentenced on October 21, 2024. On August 14, 2024, Peizer filed a motion for an acquittal and a motion for a new trial, with a hearing set for October 21, 2024. Pending that motions hearing, the sentencing hearing is now set for February 10, 2025.<ref>{{Cite web|url=https://www.justice.gov/criminal/criminal-vns/case/united-states-v-terren-s-peizer|title=Criminal Division United States v. Terren S. Peizer}}</ref> Peizer faces a maximum penalty of 65 years in prison.<ref>{{Cite web|url=https://ktla.com/news/local-news/santa-monica-man-used-anti-insider-trading-measure-to-commit-fraud-doj/|title=Santa Monica man used anti-insider-trading measure to commit fraud: DOJ|date=March 1, 2023|work=KTLA|author=Cameron Kiszla}}</ref><ref name="auto23"/>


== References ==
== References ==
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Latest revision as of 16:10, 1 November 2024

Terren Scott Peizer
Born (1959-07-31) July 31, 1959 (age 65)[1]
Beachwood, Ohio, U.S.
Alma materWharton School of the University of Pennsylvania (B.S., Economics)
OccupationBusinessperson
Years active1983–present
Known for
Criminal chargesconvicted of insider trading (two counts) and securities fraud (2024)
Criminal penaltyPeizer faces a maximum penalty of 65 years in prison[2]
Criminal statusPeizer is slated to be sentenced on October 21, 2024.[2][3]

Terren Scott Peizer (born July 31, 1959) is an American businessperson.[4] On June 21, 2024, he was found guilty by a California federal jury of three counts of insider trading and securities fraud, following a nine-day trial. Peizer faces a maximum penalty of 65 years in prison.

Peizer is the former CEO and chairman of Ontrak Inc., a publicly traded healthcare company, which he resigned from in March 2023 after US authorities charged him with insider trading and securities fraud.[1][5][6] He formerly worked as a junk bond salesman at Drexel Burnham Lambert, and ultimately testified against his former boss Mike Milken in Milken's securities fraud prosecution, in exchange for immunity from both criminal prosecution and SEC sanctions.[7] He also held executive positions in small-cap technology, debt collection, bicycle tire, shoe importing, and biotech companies.[8][9]

Early life and education

[edit]

Peizer's hometown is Beachwood, Ohio.[10] He attended Beachwood High School.[11] Peizer graduated with an undergraduate B.S. in Economics from the Wharton School of the University of Pennsylvania.[4][12][13] He resides in Dorado, Puerto Rico and Santa Monica, California.[1][14]

Career

[edit]

Early years; Drexel, and immunity to testify against Milken

[edit]

Out of college in 1983, Peizer worked for a few months at Goldman Sachs when he was 21 years old.[15][12] Later that year he worked for a stint at First Boston as a high yield bond salesman.[15]

Michael Milken hired Peizer as a junk bond salesman at Drexel Burnham Lambert in 1985.[16][17] His job was to manage the Drexel account of the president of high-yield mutual fund manager Solomon Asset Management, with whom Drexel had an illegal arrangement that included insider trading and phony tax losses.[18][19][20][10][21][22] Peizer worked directly under (and at the same desk as) Milken and admired him, sometimes pretending to be him on the phone, and calling him "Dad".[23]

When investigations into Milken's illegal activities began, Peizer starting in 1988 provided material evidence to prosecutors against Milken and Solomon.[24] At Milken's pre-sentencing hearing for securities fraud in 1990, Peizer testified against Milken in exchange for immunity from both criminal prosecution and SEC sanctions.[8][25][21][16][15] Milken pled guilty and served nearly two years in prison.[3][26]

Investor and executive in small-cap companies

[edit]

After Drexel, Peizer became a private investor in a series of small companies.[16]

1989–2000

[edit]

In 1989 Peizer purchased the Omaha Racers, a minor league basketball team, but it struggled financially.[27] He sold the team the following year.[28]

In 1991 he gained control of plastics company UTI Chemicals Inc., which had 26 employees, and became its president for a salary of $100,000; the company had a loss of over three million dollars each of the following two years.[29][30] He stepped down as its chairman in 1994.[31]

In June 1991 Peizer purchased $3.5 million of convertible debentures from Candies, Inc. (formerly known as Millfeld Trading Co.; a shoe importing and marketing business), and became a director of the company.[32][33] He had by that time already purchased 135,000 shares of the company's common stock, and when he became a director he received warrants to purchase 1.1 million shares of the company's common stock at $10.00 per share.[32][16] Peizer divested himself of over 90% of his stock in the company on September 23, 1991, one day before the company publicly acknowledged that it had materially underpaid its customs obligations and faced a $1.6 million liability.[32] In early 1992, the price of the company stock collapsed after the company disclosed that it was being investigated by federal prosecutors for systematic underpayment of its customs duties, and Peizer thereafter resigned as a director.[32]

Peizer purchased an interest of over 50% in Urethane Technologies, a small-cap company which manufactured and sold a bicycle tire that it claimed would not go flat, and named himself Chairman.[7][34] He sold his shares in 1993 at what was reported to be a $6 million profit, and the company never delivered, lost money, and went bankrupt in 1997.[7][35]

In 1993 he acquired a 37% share of now-defunct computer parts producer CMS Enhancements. He was elected chairman of the company, and held the position for two years.[36]

In the mid-1990s Peizer played a role in now-defunct Towers Financial Corporation. The company was a debt collection agency Ponzi scheme founded by fraudster Steven Hoffenberg, with which Jeffrey Epstein was involved.[16][37][38]

Peizer purchased an interest in Advanced Promotion Technologies, which manufactured electronic barcode coupon machines for checkout lines.[7] He subsequently sold his shares, and the company then went bankrupt in 1996.[7]

From 1997 to 1999, Peizer was president of Hollis-Eden, a startup pharmaceutical company.[16][7][39] The New York Times covered the company and his involvement in it in an article entitled: "No Sales, but Watch the Stock Soar".[16] By 1998 the company still had no sales or earnings.[16] That year Peizer said: "This is a once in a lifetime opportunity for me. We have something special."[35] Peizer resigned from the company in March 1999 concurrently with the dismissal of its CEO Richard B. Hollis for cause.[7][16][39] By September 1999 the company's stock was at $13.50, 47% lower than its 52-week high.[40]

In 1999 Peizer raised money for and invested in Tera Computer Company, an unprofitable 112-employee manufacturer of supercomputers.[41][42] The money that was raised allowed Tera to later buy the remains of Cray Research, and Peizer was its chairman and a director from 1999 to 2000.[43][44][45][46] He stepped down as chairman in 2000.[47] Tera said the reason was that Peizer would otherwise have been required to obtain a security clearance from the US Department of Defense by the end of 2000 to transfer Cray's classified government business to Tera by then, and Tera did not think that would happen.[47]

2001–present

[edit]

In 2004 Peizer founded Hythiam Inc., a tiny pharmaceutical company, from which in 2006 when he was majority shareholder he received $1.3 million in compensation.[48][40][49] The firm bought the rights to an ineffective addiction treatment, and marketed it.[50] Despite the fact that no placebo-controlled or double-blind study or peer-reviewed publication of its "Prometa" (the marketing name for Gabasync) approach had been undertaken, and although no FDA approval had been obtained, Hythiam advertised the "innovative, medically based treatment" (which could cost $15,000 per patient) and franchised doctors to use Prometa, in exchange for a per-patient fee.[51][40] Barrons, in a November 2005 article entitled "Curb Your Cravings For This Stock", wrote "If the venture works out for patients and the investing public, it'll be a rare success for Peizer, who's promoted a series of disappointing small-cap medical or technology stocks ... since his days at Drexel".[40] Peizer said: "Hythiam is my biggest triumph. If it's the only thing I did, then my life would have been a tremendous success."[11] Journalist Scott Pelley said to him in 2007: "Depending on who you talk to, you're either a revolutionary or a snake oil salesman."[51] 60 Minutes, NBC News, and The Dallas Morning News criticized Peizer after the company bypassed clinical studies and government approval when bringing to market Prometa; the addiction drug proved to be completely ineffective.[35][52][53][54] Journalist Adam Feuerstein opined: "most of what Peizer says is dubious-sounding hype".[55] In June 2008, Hythiam had generated a net loss each year for 5 straight years, and while its stock had traded at $61.26 a share in 2007, it traded at $0.18 per share three years later (a 99.7% drop).[56][57][58] According to independent investment research firm Morningstar: "Over the long haul, this company has posted some of its industry's worst returns on assets."[56]

In 2018, Peizer became CEO and chairman of BioVie, a pharmaceutical company of which he was majority shareholder (his ownership was 88% as of June 2021).[59][60] In 2021 the company entered into an agreement to buy a product from another company he controlled, NeurMedix, for up to $10 million and over 8 million BioVie shares; that led to a 15% share price drop in one day to $18.30 a share, and in April 2023 the company's share price was down to $8.08.[61][62][63] He resigned on March 2, 2023, the day after he was criminally indicted, at which point the company had not yet received any revenue, and had lost $26 million in 2022.[64][59]

In March 2021 Peizer became the controlling shareholder and board Executive Chairman of EVmo, a technology-enabled fleet management and rental company, which had a share price of $5.45 the prior month.[65][66][67] He resigned as EVmo Chairman on February 17, 2023, as the company defaulted on a $7.5 million loan, and its stock price had declined to $0.17 per share.[66][67][65]

He is the founder and CEO of Acuitas Group Holdings (of which he is the sole shareholder), biotech company NeurMedix (of which he was the sole shareholder, and which in 2021 made a multi-million dollar sale to BioVie, of which Peizer was CEO), and blockchain company Casperlabs.[12][68]

Ontrak; Indictment and conviction

[edit]

Until his 2023 indictment, he was CEO and chairman of Catasys, Inc. (later renamed Ontrak Inc.), a publicly traded healthcare company that he had founded in 2003.[69][15][70] Peizer was also Ontrak’s biggest shareholder.[2] His 2018 compensation at the company was $2.4 million, over twice that of CEOs of similar companies.[71]

On March 1, 2023, after an FBI investigation, Peizer was charged with insider trading by the SEC, which alleged that he sold $20 million of Ontrak Inc. stock in 2021 while he was in possession of material nonpublic negative information related to the company's largest customer.[72][70][73][74] Ontrak shares, which had traded at $85.21 in February 2021, were trading at under $1.00 since July 2022.[15][75] In addition, the U.S. Department of Justice announced criminal charges of insider trading and securities fraud against Peizer, charging that thereby he had avoided $12 million in losses; Peizer was arrested.[1][73][15][76] His case was assigned to the U.S. District Court for the Central District of California, before U.S. District Judge Dale S. Fischer.[1]

On March 2, 2023, he resigned as Ontrak CEO and Chairman.[5] On January 31, 2024, a superseding indictment was filed, charging Peizer with additional counts of securities fraud and insider trading.[77] On February 9, 2024, Peizer moved to dismiss the indictment.[78] On March 7, 2024, Judge Fischer denied Peizer’s motion to dismiss, holding that the government had alleged facts sufficient to give rise to a charge of insider trading.[78] Trial was set for June 4, 2024.[77]

On June 21, 2024, he was convicted and found guilty by a Los Angeles, California, federal jury of three counts of insider trading and securities fraud, following a nine-day trial.[2] Peizer was slated to be sentenced on October 21, 2024. On August 14, 2024, Peizer filed a motion for an acquittal and a motion for a new trial, with a hearing set for October 21, 2024. Pending that motions hearing, the sentencing hearing is now set for February 10, 2025.[79] Peizer faces a maximum penalty of 65 years in prison.[80][2]

References

[edit]
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