On August 19, 2021, news broke that Cigna was ending its deal with Ontrak, causing stock prices to drop 45%. Prosecutors asked Dodge if he was surprised by the termination, to which he replied affirmatively, citing previous positive indications from Ontrak regarding Cigna.
Defense attorney Jamie Lang of King & Spalding LLP cross-examined Dodge, pointing out that Ontrak’s August 2021 SEC form disclosed risks of losing major customers and that Peizer’s trades involved expiring stock warrants, which he needed to exercise to avoid losing their value.
Lang highlighted that the majority of Peizer’s trades occurred after Cigna’s termination was announced, suggesting that the sales were not based on insider knowledge.
The trial continues on Friday.
The government is represented by Matthew Reilly and Della G. Sentilles of the U.S. Department of Justice, and Ali Moghaddas of the U.S. Attorney’s Office for the Central District of California.
Peizer is represented by David K. Willingham, Yelena Kotlarsky, and Jamie A. Lang of King & Spalding LLP, and Stephen A. Best, Angela M. Papalaskaris, and Stephen R. Cook of Brown Rudnick LLP.
