SEC-PR-2412-195 (Dec. 11, 2024) (SEC-PR-2412)
SEC Charges Ken Peterman, Former Comtech CEO, with Insider Trading in Advance of Negative Earnings Announcement – Defendant placed order to sell company’s securities within hours of his termination for cause while subject to multiple trading blackouts
Excerpt: Washington D.C., Dec. 11, 2024 — The Securities and Exchange Commission today announced insider trading charges against Ken Peterman, the former CEO, president, and Chair of the Board of Comtech Telecommunications Corp., in connection with his sale of Comtech shares on the basis of material non-public information about Comtech’s forthcoming negative quarterly earnings results.
According to the SEC complaint, Peterman allegedly received a confidential presentation detailing Comtech’s forthcoming negative quarterly earnings results on March 4, 2024. He was allegedly informed that he was being terminated for cause eight days later, on March 12, 2024. The SEC’s complaint alleges that a few hours after he was terminated, and while subject to two different trading blackouts, Peterman placed an order to sell Comtech stock. On March 18, 2024, Comtech reported its negative quarterly earnings, which caused its stock price to drop more than 25 percent. The complaint alleges that Peterman avoided losses of about $12,445 by trading in advance of Comtech’s negative earnings announcement. Peterman allegedly directed his financial advisor to sell additional Comtech stock he held in a joint account, but the financial advisor was unable to complete the sale because of a trading blackout. Had the sale been completed, Peterman allegedly would have avoided additional losses of about $110,000.
“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. C-suite executives like the defendant, a CEO with decades of experience, know that it is illegal to use their company’s confidential information for their own financial gain,” said Tejal D. Shah, Associate Director of the SEC’s New York Regional Office. “Our action today should serve as a strong deterrent to those executives who might think about going down the same path.”
Source: (https://www.sec.gov/newsroom/press-releases/2024-195)
Categories: (Insider Trading)
SEC-PR-2412-195 (Dec. 11, 2024)