37°
Ken Peterman, 67, was arrested Wednesday, Dec. 11, on federal charges of insider trading and securities fraud.
Prosecutors said Peterman exploited non-public information about Melville-based Comtech Telecommunications’ poor financial performance and his impending termination to sell company shares, avoiding significant financial losses.
According to the US Securities and Exchange Commission (SEC), he violated two trading blackouts when he placed an order to sell Comtech stock just hours after being terminated for an alleged improper relationship with a subordinate in March.
The sale allowed him to avoid losses of approximately $12,445, investigators said.
Nearly a week later, the company reported negative quarterly earnings, which caused the stock price to drop by more than 25 percent. The SEC alleged that Peterman attempted to sell additional shares from a joint account that would have helped him avoid further losses totaling around $110,000.
“The defendant exploited for his own personal benefit confidential information that was meant to be available only for corporate purposes,” said US Attorney Breon 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.”
Peterman resides in Encinitas, California. He was taken into custody Wednesday morning in San Diego and is scheduled to make his first appearance in the Southern District of California on Thursday, Dec. 12.
He is expected to be arraigned in the Eastern District of New York at a later date. If convicted on the top count, he faces up to 25 years in federal prison.
Peterman was the president and CEO of Comtech for nearly two years before he was fired. He is also the founder and current CEO of the Washington DC-based technology company The Spyglass Group.
Click here to follow Daily Voice East Greenbush and receive free news updates.
