By Connor Hart
Ken Peterman, the former chief executive of Comtech Telecommunications, has been charged with insider trading and securities fraud, the Justice Department said Wednesday.
He faces up to 25 years in prison if convicted of securities fraud, and up to 20 years if he is found guilty of wire fraud. Peterman couldn't immediately be reached for comment.
The Securities and Exchange Commission alleged that Peterman on March 4 received a confidential presentation detailing Comtech's then-upcoming negative quarterly earnings. He was additionally informed that he would be terminated for cause later that month on March 12.
On that day, after being terminated and while subject to two different trading blackouts, Peterman placed an order to sell company stock that he owned, the price of which would drop by more than 25% on March 18 following Comtech's negative quarterly earnings report, the SEC said in its complaint.
This trade avoided losses of about $12,445, according to the complaint.
The SEC also alleged that Peterman directed his financial adviser to sell additional Commtech stock held in a joint account. The adviser was unable to complete the sale because of a trading blackout. If that transaction had been completed Peterman would have avoided additional losses of about $110,000, the SEC said.
"There is no gray area when it comes to trading on the basis of material non-public information in breach of one's fiduciary duty," the SEC's New York Regional Office Associate Director Tejal Shah said.
Peterman couldn't immediately be reached for comment.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
December 11, 2024 18:01 ET (23:01 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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