Indicted Former CEO of Melville Company for Insider Trading & Wire Fraud
The former CEO of a telecommunications company in Melville found themselves in hot water this week, facing charges of insider trading and wire fraud. Ken A. Peterman, who used to lead Comtech Telecommunications Corp, was arrested in San Diego following a three-count indictment.
It’s alleged that Peterman sold his shares before a negative earnings report and news of his imminent ousting due to an inappropriate relationship with a subordinate. These actions led to charges of insider trading, wire fraud, and securities fraud. If convicted, he could face up to 25 years for securities fraud and 20 years for wire fraud.
As per the U.S. Attorney for the Eastern District of New York, Peterman misused confidential information for personal gain, breaching the trust of both his employer and shareholders. Despite serving less than two years as CEO of the company, which produces satellite base stations and next-gen 911 systems, Peterman’s actions had significant consequences.
After his termination in March, Comtech’s stock plummeted by 27%, with a further 25% drop after an earnings report. Peterman now faces legal proceedings with his first appearance scheduled in California before extradition to New York for arraignment at a later date.
It’s a cautionary tale for those in positions of power, highlighting the importance of ethical conduct and the severe consequences of fraud in the world of finance and securities exchange.
