Litigation Releases (Michael Smith and Douglas Joshua Dalton)

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26518 / April 1, 2026

Securities and Exchange Commission v. Michael A. Smith and Douglas Joshua Dalton, No. 26-cv-00193 (D. Idaho filed Mar. 31, 2026)

SEC Charges Former Executive and his Friend with Insider Trading

On March 31, 2026, the Securities and Exchange Commission filed charges against Michael A. Smith, the former President and Chief Operating Officer of PetIQ, Inc., and his friend Douglas Joshua Dalton, for insider trading ahead of the August 7, 2024 announcement that private equity firm Bansk Group LP would acquire PetIQ.

According to the SEC's complaint, Smith purchased PetIQ common stock in his ex-wife's brokerage accounts on the basis of material nonpublic information about the potential acquisition of PetIQ, which he learned through his employment. As alleged, shortly after making these purchases, Smith shared information about the potential acquisition with his friend Dalton, and, on the basis of that information, Dalton purchased PetIQ call options. The complaint further alleges that when the acquisition was later announced, the price of PetIQ's common stock rose 48%, and Smith and Dalton collectively made more than $200,000 in illicit profits.

In parallel criminal actions, the U.S. Department of Justice announced charges against Dalton, and Smith previously pleaded guilty to securities fraud and is awaiting sentencing.

The SEC's complaint, filed in federal court in the District of Idaho, charges Smith and Dalton with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and a bar that would prevent Smith from serving as an officer or director of a public company.

The SEC's investigation, which is continuing, was conducted by Andrew Palid, David Scheffler, John Rymas, and Michele T. Perillo of the Division of Enforcement's Market Abuse Unit, under the supervision of Joseph G. Sansone. Kathleen Shields of the SEC's Boston Regional Office will lead the litigation. The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division's Fraud Section, the U.S. Postal Inspection Service, and the Financial Industry Regulatory Authority.