OTRK - Ontrak drops 12% as CEO resigns after insider trading charges

2023-03-06 07:04:10 ET

The shares of Ontrak ( NASDAQ: OTRK ) fell ~12% pre-market Monday after the health tech company announced the resignation of its chairman and chief executive, Terren Peizer, effective immediately. Mr. Peizer's resignation on Mar. 03 comes days after the Securities and Exchange Commission (SEC) brought insider trading charges against him.

"Mr. Peizer explained that his resignation was for the good of the Company and to minimize any distraction from the important work that the Company does," Ontrak ( OTRK ) said in a regulatory filing.

Brandon LaVerne, who functioned as the company's Co-President and Chief Operating Officer since June 2022, is set to take over the leadership role with immediate effect.

Mr. LaVerne, who was Ontrak's ( OTRK ) Chief Financial Officer from March 2020 – June 2022, will continue to hold the COO role but will no longer serve as the Co- President, the company added.

Last week, the SEC alleged that Mr. Peizer avoided more than ~$12M losses related to sales of more than $20M Ontrak ( OTRK ) shares while possessing material nonpublic information.

In a case filed in a California district court, the regulator sought, among other things, civil penalties and a ban on Peizer from holding positions as an officer and director.

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