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Terren Peizer

Terren Peizer

American investment manager
Terren Peizer
The basics

Quick Facts

Intro American investment manager
Is Banker Financial professional Investment banker
From United States of America
Type Business Finance
Gender male
Birth Beachwood, Cuyahoga County, Ohio, USA
Education
The Wharton School
The details

Biography

Terren Scott Peizer, is an investor, financier and stock promoter. He is the founder of the Los Angeles-based investment companies Acuitas Group Holdings, and is the CEO of Ontrak.

Peizer has held various senior executive positions within several technology and biotech companies, and was employed by Goldman Sachs, First Boston and Drexel Burnham Lambert as a bond salesman.

Early life and education

Peizer was born in 1959, and raised in Beachwood, Ohio, a suburb of Cleveland. He graduated from the Wharton School of the University of Pennsylvania.

Career

In 1983, Peizer worked at First Boston, where he worked as a high yield bond salesman. After two years there he was interviewed by Michael Milken for a position at Drexel Burnham Lambert.
Even though Michael's brother Lowell disapproved of Peizer, he was hired nevertheless, and given a 3.5 million dollar salary, as well as a $500.000 loan, so he could invest in the partnership. Peizer worked directly under (and at the same desk as) Milken, whom he admired, sometimes pretending to be him on the phone, and calling him "Dad".

When investigations into Milken's illegal activities started, Peizer approached the investigators, and offered them material evidence, in exchange for immunity.

In 1989, after losing his job at Drexel Burnham Lambert (who were about to go bankrupt), Peizer moved back to his parents in Cleveland, and purchased a minor league basketball team, the Omaha Racers, which he sold again after about a year..

Major deals and financial transactions

From 1991 to '92 Peizer was a director at the shoe company Millfeld Trading, of which he owned $3.5M worth of stock. He sold 90% of his shares one day before the management admitted it had underpaid its Customs duties for many years. Peizer was sued, along with the management, but the case against him was later dismissed.

Between 1991 and '95 Peizer was also Chairman & CEO of Urethane Technologies, which was producing bicycle tires.
The company had been making losses since its inception in 1985, and went bankrupt in 1997.

From 1993 to '95 he was the Chairman at CMS Enhancements (a subsidiary of Ameriquest), which produced computer parts.

From 1997 to '99 Peizer was president of Hollis-Eden, which was marketing an anti-AIDS drug.

In 1999 Peizer raised money for Tera Computer Company, a manufacturer of supercomputers, which allowed them to later buy out Cray Research. Peizer became chairman & director of Cray, until he stepped back one year later.

In 2003 he acquired Hythiam (via a reverse merger with Alaska Freightways), in order to market a drug-treatment program named Prometa. When, after a few years or trial studies, it became clear that the treatment wasn't working, the stock price crashed, and Hythiam was delisted from NASDAQ in 2010.. After renaming the company to Catasys, and executing several reverse stock splits it was relisted.. Catasys is offering telehealth services, and was renamed to Ontrak in 2020.

In 2006 CT Holdings (Peizer's holding company), merged with Xcorporeal (another company owned by Peizer), and then attempted to merge with National Quality Care Inc., a developer of portable dialysis machines. According to NQCI and the arbitrator Xcorporeal was guilty of several contract breaches during the negotiations, and had to pay $1.8M in damages to NQCI. Subsequently, merger talks were aborted.

In 2009 Peizer started a new investment company, called Socius Capital Group, with Michael S. Wachs as an equal partner.
Wachs had been convicted of bank fraud in 1997, served a year in prison, and was barred from the banking and brokerage industries. Despite this, Wachs started a video production company, CEOcast, to promote penny stocks and was involved with Socius for several years.
Another of Socius’s employees was Richard Josephberg, who was sentenced twice for tax evasion, and received a 50 month sentence in 2007 and a 42 month sentence in 2019. Josephberg sued Socius in 2013 for non-payment of $4.8M in sales commission.
In 2012 the group was renamed to Crede Capital Group.

In 2012 Peizer arranged investments of $40M for Cell Therapeutics, which was developing a cancer drug.
Even though the company had been fined $10M in 2007, for marketing & selling an unapproved drug, they were still in the cancer business.
In 2015 FINRA convicted the company's broker, Halcyon, of securities violations during the transactions between Socius and CTIC, and barred Halcyon from trading.

In 2014 Crede (Peizer's investment vehicle) invested $10M into 22nd Century Group, a company that produces low-nicotine cigarettes.
Relationships broke down after two years though, when Crede sued them for $250M in damages.
After 3 years in court, the case was dismissed.

In 2014 Peizer also started Neurmedix, which is a "virtual" company (without any production or research facilities) that markets drugs for Parkinson’s, migraine, Lou Gehrig's & Huntington's Disease, Alzheimer's and encephalitis, and that's awaiting its IPO.

In 2018 Peizer founded BioVie, which markets treatments for liver cirrhosis. Even though the patent for their main product, BIV201, had been struck down in 2019, BioVie is still planning to go public.

Financial vehicles

Over the years Peizer has used the following holding and investment companies to conduct business (listed roughly in chronological order):

  • Financial Group Holdings (California)
  • Beachwood Financial (California)
  • Wendover Financial (California)
  • Socius Capital Group (Delaware)
  • Socius CG II (Bermuda)
  • Crede Capital Group (Delaware)
  • Crede CG II (Bermuda)
  • Crede CG III (Bermuda)
  • Intellect Capital Group (Delaware)
  • Acuitas Group Holdings (California)
  • Acuitas Capital Group (California)
  • Acuitas Financial Group (California)
  • Optimus Capital Partners (Delaware)
  • Optimus CG II (Cayman Islands)
  • Optimus Life Sciences Capital Partners (Cayman Islands)

Prometa criticism

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. 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. 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 than 31 percent of all prescriptions prescribed by physicians are written for " off-label" use.

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. In July 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.

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. 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.

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. 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."

The contents of this page are sourced from Wikipedia article on 30 Jul 2020. The contents are available under the CC BY-SA 4.0 license.
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References
https://www.nasdaq.com/articles/22nd-century-group-lot-smoke-not-enough-fire-2014-08-27
https://www.wsj.com/articles/SB113115427427989094
https://www.nytimes.com/1990/10/20/business/kohlberg-kravis-official-tells-of-a-hidden-milken-stake.html
https://www.nytimes.com/1998/02/17/business/market-place-no-sales-but-watch-the-stock-soar.html
https://books.google.ca/books?id=2xclCwAAQBAJ&lpg=PA143&ots=CTkSUVj9P8&dq=dancing%20at%20the%20predator's%20ball%20peizer&pg=PA143#v=onepage&q&f=false
https://www.nytimes.com/1988/12/10/business/4th-drexel-employee-in-immunity-bargain.html
https://www.scribd.com/document/468919536/Of-Rats-and-Riches-Article
https://funwhileitlasted.net/2018/03/13/1989-1997-omaha-racers/
https://www.scribd.com/document/470821212/From-Rats-to-Riches
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