Earlier today, an indictment was unsealed 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 is set to appear in federal court in the Southern District of California tomorrow. His arraignment will take place later in the Eastern District of New York.

The arrest and charges were announced by 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.

“As alleged, the defendant exploited for his own personal benefit confidential information, including derogatory news of his own impending termination, that was meant to be available only for corporate purposes,” 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. My Office will vigorously prosecute those, like Peterman, who would seek to enrich themselves at the expense of ordinary investors and the integrity of the securities markets.”

Mr. Peace also acknowledged the efforts of the U.S. Securities and Exchange Commission's New York Regional Office 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," stated FBI Assistant Director Dennehy. "This alleged attempt at self-preservation exploited a respected position and disrupted public confidence in future financial leadership."

Peterman served as CEO and Chairman of Comtech's Board of Directors. He had access to material non-public information about Comtech’s financial performance. In early March 2024, he learned from Comtech’s Chief Financial Officer about an upcoming negative earnings release. Around this time, he was also informed that he would be terminated due to an alleged improper relationship with a subordinate employee.

The indictment claims that on March 12, 2024, after learning about these developments but before they were made public, Peterman sold or attempted to sell tens of thousands of shares of Comtech stock held in two brokerage accounts.

The charges are allegations; Peterman is presumed innocent until proven guilty. If convicted of securities fraud, he faces up to 25 years in prison; if convicted of wire fraud, up to 20 years.

In July 2022, Mr. Peace became Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC), playing a key role in recommending measures against financially motivated crimes like those alleged against Peterman.

Assistant United States Attorney Anthony Bagnuola is leading the prosecution from the Criminal Section of Long Island Division.