An indictment was unsealed today at the federal courthouse in Central Islip, charging Ken Peterman, former CEO of Comtech Telecommunications Corp., with insider trading and securities fraud. Peterman was arrested in San Diego and will make his initial appearance tomorrow in federal court in the Southern District of California. He will be arraigned later in the Eastern District of New York.
Breon Peace, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge of the FBI's New York Field Office, announced these charges.
"As alleged, the defendant exploited for his own personal benefit confidential information, including derogatory news of his own impending termination," stated United States Attorney Peace. "In doing so before he was shown the door, Peterman breached the trust and confidence placed in him by his former employer and its shareholders."
Peace also acknowledged the U.S. Securities and Exchange Commission's assistance on this case.
"Ken Peterman allegedly acted on non-public information of the company’s confidential fiscal reporting and his pending termination to avoid financial repercussions," said FBI Assistant Director Dennehy.
Peterman served as CEO and Chairman of Comtech's Board of Directors. The indictment claims that after receiving a confidential briefing about an upcoming negative earnings release from Comtech’s CFO in early March 2024—and learning about his potential termination—Peterman attempted to sell tens of thousands of shares before this information became public.
The allegations against Peterman remain unproven until a conviction is secured. If convicted, he could face up to 25 years for securities fraud and up to 20 years for wire fraud.
In July 2022, Mr. Peace became Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC), playing a significant role in recommending measures to prevent financial crimes like those alleged against Peterman.
The prosecution is being handled by Assistant United States Attorney Anthony Bagnuola from the Criminal Section of the Office’s Long Island Division.
Ken A. Peterman is 67 years old from Encinitas, California.