EX-EXEC TRADES ON EX-WIFE'S ACCOUNT FOR $200K INSIDER WIN!

SEC v. Michael A. Smith, Douglas Joshua Dalton — U.S. Securities and Exchange Commission Litigation Release No. 26518, dated April 1, 2026.

The SEC charged Michael A. Smith, former COO of PetIQ, and his friend Douglas Joshua Dalton with insider trading. Smith allegedly used confidential information about PetIQ's impending acquisition to buy stock in his ex-wife's accounts, then tipped off Dalton, who bought call options. They collectively profited over $200,000.

In Plain English

Imagine you know a secret about a popular toy company that it's going to be bought by a bigger company, which will make its toys more valuable. You're not supposed to tell anyone or use that secret to buy toys yourself. But, a former executive of the toy company told his friend about the secret. The friend then bought a lot of the toy company's stock options, which are like bets that the stock price will go up. When the secret got out and the company was bought, the stock price jumped, and both men made a lot of money they shouldn't have.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Executive Learns of Acquisition Michael A. Smith, President and COO of PetIQ, learned material, non-public information about a potential acquisition of PetIQ by Bansk Group LP through his employment. This information was part of discussions among PetIQ's board and management.
2. Smith Trades on Inside Information On July 26, 2024, Smith breached his duty to PetIQ and its shareholders by purchasing PetIQ common stock. He made these purchases in his ex-wife's brokerage accounts, using the confidential acquisition information.
3. Smith Tips Off Friend Shortly after his purchases, Smith shared the material, non-public information about the potential acquisition with his close friend, Douglas Joshua Dalton.
4. Dalton Trades on Tipped Information Dalton understood that Smith's information was confidential due to Smith's executive position. On the basis of this tip, Dalton purchased PetIQ call options in late July and early August 2024.
5. Acquisition Announced On August 7, 2024, PetIQ publicly announced that Bansk Group LP would acquire the company. This announcement was the event that the defendants were trading ahead of.
6. Stock Price Surges Following the announcement, the price of PetIQ's common stock rose significantly. The stock price increased by 48%, from $20.57 per share the day before the announcement to $30.42 per share on August 7, 2024.
7. Defendants Realize Illicit Profits As a result of their insider trading, Smith and Dalton collectively made over $200,000 in illicit profits. Smith earned approximately $145,772 in his ex-wife's accounts, and Dalton gained approximately $101,670.

The Enforcement Action

On March 31, 2026, the SEC filed charges against Michael A. Smith and Douglas Joshua Dalton for insider trading ahead of PetIQ's acquisition announcement. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and an officer/director bar for Smith. In parallel criminal actions, Dalton faces charges from the DOJ, and Smith previously pleaded guilty to securities fraud and awaits sentencing.

Named in this action: Michael A. Smith, Douglas Joshua Dalton.

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