SEC v. Ken Peterman, No. 2:24-cv-08475, Eastern District of New York (Mar. 4, 2024) — Complaint

ANTONIA M. APPS
REGIONAL DIRECTOR
Tejal D. Shah
Liora Sukhatme
Travis Hill
Mary Kay Dunning
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
212-336-5039 (Dunning)
[email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

KEN PETERMAN,

                                             Defendant.

COMPLAINT

24 Civ. 8475

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendant Ken Peterman (“Peterman”), alleges as follows:
SUMMARY
1. Defendant Peterman—the former chief executive officer (“CEO”), chair of the
Board of Directors (“Board”), and president of Comtech Telecommunications Corp.
(“Comtech”)—engaged in insider trading by selling his Comtech stock on the basis of material
non-public information about Comtech’s negative earnings results before Comtech publicly
announced them.

 2
2. On March 4, 2024, Peterman attended a meeting of the Comtech Board’s Audit
Committee and received confidential oral and written presentations. The presentations revealed
that Comtech’s forthcoming financial results for the quarter that had ended on January 31, 2024
(the second quarter of Comtech’s fiscal year 2024, or “Q2 FY24”) would show a 12% decrease
in net sales from the prior quarter, among other negative earnings results.
3. At the time, Comtech had two trading blackouts in effect (each for different
reasons) that prohibited Peterman from trading in Comtech securities. One of the blackouts—a
recurring quarterly trading blackout designed to prevent Comtech officers and directors from
trading their Comtech shares while Comtech was finalizing its earnings results for the prior
quarter but before it had publicly announced them—would continue until the second business
day after Comtech’s public announcement of its earnings results for Q2 FY24. Peterman had
previously certified that he had read the Comtech conduct policy that explained this blackout
period, and his own remarks at the beginning of the policy underscored employees’ personal
responsibility for complying with the conduct standards, including this blackout period.
4. On the evening of March 12, 2024, two Comtech directors informed Peterman
that the Board had terminated him for cause effective immediately.
5. Hours later, Peterman tried to trade ahead of Comtech’s announcement of his
termination by placing a market order to sell all 8,241 Comtech shares in his equity
compensation management account (the “Compensation Account”).
6. On Wednesday, March 13, 2024, at approximately 9:00 a.m., Comtech issued a
press release announcing Peterman’s termination.

 3
7. On Wednesday, March 13, 2024, at approximately 9:35 a.m., Peterman’s
brokerage firm began selling the shares of Comtech stock in Peterman’s Compensation
Account.
1
 Within 25 minutes, all of Peterman’s shares in this account had been sold for net
proceeds of $40,454.54 at a weighted average price of $4.94 per share. On Monday, March 18,
2024, after the market close, Comtech publicly filed its Form 10-Q announcing its negative
earnings results for Q2 FY24.
8. The next day, Comtech’s stock price closed at $3.43 per share, dropping 25.4%
from the previous day’s closing price of $4.60 per share.
9. By selling his Comtech stock with knowledge of Comtech’s forthcoming material
non-public negative earnings results, Peterman breached his duty of trust and confidence to
Comtech and its shareholders and avoided losses of approximately $12,445.44. Peterman would
have avoided significantly more losses had he succeeded in his attempts to similarly sell
additional shares of Comstock stock he held in a different account.
VIOLATIONS
10. By virtue of the foregoing conduct and as alleged further herein, Peterman
violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C.
§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
11. Unless Peterman is  restrained and enjoined, he will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
12. The Commission brings this action pursuant to the authority conferred upon it by

1
  All times set forth herein are in Eastern Time.

 4
Exchange Act Sections 21(d) and 21A [15 U.S.C. §§ 78u(d) and 78u-1(a)].
13. The Commission seeks a final judgment: (a) permanently enjoining Peterman
from violating the federal securities laws and rules this Complaint alleges he has violated;
(b) ordering Peterman to disgorge all ill-gotten gains he received as a result of the violations
alleged herein and to pay prejudgment interest thereon, pursuant to Exchange Act Sections
21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (c) ordering
Peterman to pay civil money penalties pursuant to Exchange Act Section 21A [15 U.S.C. § 78u-
1]; ( d)   permanently prohibiting Peterman from serving as an officer or director of any company
that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that
is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to
Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; and (e) ordering any other and further
relief the Court may deem just and proper.
JURISDICTION AND VENUE
14. This Court has jurisdiction over this action pursuant to Exchange Act Section 27
[15 U.S.C. § 78aa].
15. Peterman, directly and indirectly, has made use of the means or instrumentalities
of interstate commerce or of the mails in connection with the transactions, acts, practices, and
courses of business alleged herein.
16. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa],
because certain of the acts, practices, transactions, and courses of business constituting the
violations alleged in this Complaint occurred in the Eastern District of New York. Among other
things, Peterman received the material non-public earnings information at issue in this case at an
in-person meeting in Melville, New York.

 5
DEFENDANT
17. Peterman, age 67, resides in Encinitas, California. Peterman served as president
and CEO of Comtech from August 10, 2022, until March 12, 2024, when he was terminated for
cause.
RELEVANT ENTITY
18. Comtech is a Delaware-incorporated global technology company whose
corporate headquarters were located in Melville, New York until March 2024, when Comtech
relocated its corporate headquarters to Chandler, Arizona. Comtech provides terrestrial and
wireless network solutions, next-generation 9-1-  1 emergency services, satellite and space
communications technologies, and cloud native capabilities to commercial and government
customers. Comtech’s common stock is listed on the NASDAQ Stock Market LLC stock
exchange and trades under the symbol “CMTL.”
FACTS
I. As Peterman Knew, He Had a Duty to Protect Comtech’s Confidential Information
and to Refrain from Trading on Comtech’s Material Non-public Information.
19. On May 10, 2022, Peterman was appointed to Comtech’s Board.
20. On July 25, 2022, he was named chair of the Board.
21. On August 10, 2022, Peterman was named president and CEO of Comtech.
22. As Comtech’s CEO, chair of the Board, and president, Peterman owed a duty of
trust and confidence to Comtech and its shareholders to maintain the confidentiality of
Comtech’s material non-public information and to refrain from trading on it.
23. On September 12, 2022, Comtech and Peterman entered into an employment
agreement (“Employment Agreement”) that Peterman signed.
24. The Employment Agreement made clear that Peterman would have access to

 6
“Confidential Information,” defined as “information that constitutes trade secrets, is of a
confidential nature, is of great value to [Comtech] or is the foundation on which the business of
[Comtech] is predicated.”
25. In the Employment Agreement, Peterman agreed not to disclose Confidential
Information “during his employment and thereafter” to anyone other than Comtech’s employees
or lawyers or others authorized by Comtech to receive Confidential Information. He also agreed
not to “use for any purpose, other than the performance of [the Employment], any Confidential
Information.”
26. The Employment Agreement made clear that its provisions governing
Confidential Information “survive[d] the termination, expiration or cancellation of [Peterman’s]
employment.”
27. In September 2022, Comtech issued and distributed to its employees its Standards
of Business Conduct (“Conduct Standards”), a set of policies that applied to all employees of
Comtech.
28. The Conduct Standards contained an introductory message from Peterman
underscoring each employee’s personal responsibility for complying with the standards:
These Standards of Business Conduct are a guide to help all employees of
Comtech live up to our high ethical standards.... At Comtech, each of us
has the personal responsibility to make sure that our actions abide by these
Standards of Business Conduct, as well as the specific laws and Company
policies and procedures that apply to our roles.
29. The Conduct Standards prohibited trading in Comtech securities while in
possession of material non-public information.
30. Specifically, in the section titled “Confidential Information and Securities Law,”
the Conduct Standards stated:
‘Insider trading’ is the purchase or sale of a publicly traded security while

 7
in possession of important non-public information about the issuer of the
security. ‘Tipping’ is communicating such information to anyone who
might use it to purchase or sell securities. No employee may engage in
either insider trading or tipping.
Employees who have questions pertaining to the sale or purchase of
Company securities under circumstances where confidential information
or securities laws may be involved should consult with the Company’s
Corporate Chief Financial Officer or Corporate Compliance Officer.
When in doubt, information obtained as an employee of the Company
should be presumed to be important and not public.
31. During Peterman’s employment at Comtech, Comtech required all of its
employees each year to complete online training about the Conduct Standards and “to
electronically certify that they have received and read the [Conduct Standards] and that they have
and will abide by these [Conduct Standards] as well as the specific laws and Company policies
and procedures that apply to them and their roles.”
32. The online training about the Conduct Standards contained an accompanying
quiz. The quiz contained a question requiring employees to acknowledge and certify that they
had received and read the Conduct Standards, including the provisions relating to insider trading,
and that they had and would abide by the Conduct Standards, “as well as the specific laws and
Company policies and procedures that apply to them and their roles.”
33. The quiz also alerted employees that the “online electronic acknowledgement and
certification of the [Conduct] Standards is considered equivalent to an actual written signature”
and “is considered legally binding.”
34. On December 26, 2023, Peterman completed and certified that he had completed
the “Standards of Business Conduct Training FY 2024” for Comtech’s fiscal year 2024.
II. Peterman Obtained Shares of Comtech Stock Through His Employment.
35. Pursuant to the Employment Agreement, Comtech granted Peterman 42,518
Comtech restricted stock units that vested on an annual basis over three years and a $1 million

 8
bonus to purchase Comtech stock in the open market.
36. On January 11, 2023, Peterman used his $1 million signing bonus to purchase
44,000 shares of Comtech common stock in the open market, and on June 13, 2023, he
purchased another 5,400 shares.
37. Following these purchases, Peterman owned a total of 49,400 shares of Comtech
common stock, which he held in an account under his and his wife’s names at a large brokerage
firm (the “Joint Account”).
38. As the CEO of Comtech, Peterman was an “affiliate” of Comtech for purposes of
Rule 144 promulgated under the Securities Act of 1933.
39. As such, the Comtech shares Peterman held in the Joint Account were considered
control securities under Rule 144.
40. Therefore, the brokerage firm that held Peterman’s Joint Account would not allow
Peterman to sell the Comtech shares in this account without prior written approval from
Comtech.
41. On September 12, 2023, Peterman’s one-year employment anniversary, Comtech
released 14,173 restricted stock units to Peterman.
42. Of this amount, Comtech withheld 5,932 restricted stock units to cover
Peterman’s tax liability and converted 8,241 restricted stock units into 8,241 shares of Comtech
common stock.
43. Peterman held these 8,241 Comtech shares in his Compensation Account, held at
a different brokerage firm from the one that held his Joint Account.
III. Peterman Was Subject to Two Trading Blackout Periods.
44. The Conduct Standards mandated that “to reduce the risk of inadvertent violations
of securities laws,” Comtech’s officers and directors were prohibited from trading in Comtech

 9
securities other than during certain open “window periods” tied to the Company’s fiscal year
quarters.
45. As the Conduct Standards explained, each trading window period—the period
when Comtech’s officers and directors could trade in Comtech securities—opened on the second
business day after Comtech’s release of earnings results for the prior fiscal quarter. The trading
window closed ten calendar days before the end of the third month of the then-current fiscal
quarter.
46. In addition to being subject to the quarterly trading windows set forth in the
Conduct Standards, Comtech employees were also subject to special trading blackout periods
from time to time.
47. On October 13, 2023, Peterman received an email from Comtech’s general
counsel notifying him that Peterman and other Comtech officers and directors were subject to a
special trading blackout period arising from two confidential Comtech projects (“Special
Blackout Period”):
While Comtech routinely opens the Trading Window for its Section 16
insiders on the second business day following an Earnings Release, we are
instead imposing a Special Blackout Period, effective immediately, to
avoid any improper transactions while there are nonpublic developments
that could be considered material for insider trading law purposes. During
this period, you may not trade in Comtech securities without express
coordination with the Chief Legal Officer and Corporate Secretary and
you may not disclose the existence of the Special Blackout Period to any
other person.
We will contact you when the Special Blackout Period is concluded. In the
interim, please direct your questions to me directly.
48. Approximately four months later, on February 8, 2024, Comtech’s general
counsel emailed Peterman and others to remind them of their ongoing obligation to refrain from
trading in Comtech securities due to the Special Blackout Period:

 10
The purpose of this email is to alert you to your ongoing obligations in
connection with [the confidential projects]. Specifically, the Special
Blackout Period that was announced on or about October 13,
2023...remains in effect until you are notified otherwise in
writing. Accordingly, you may not trade in Comtech securities without
first coordinating with the CLO [Chief Legal Officer] and Corporate
Secretary.
49. The Special Blackout Period remained in effect through at least April 1, 2024.
IV. Peterman Learned of Comtech’s Confidential Q2 FY24 Negative Earnings Results
Two Weeks Before Comtech Publicly Announced Them.
50. On January 31, 2024, Comtech’s Q2 FY24 ended.
51. Under the Conduct Standards, the quarterly trading window for Comtech officers
and directors, including Peterman, closed ten calendar days prior to the end of the fiscal quarter,
on approximately January 21, 2024, and it would remain closed until the second business day
following the release of Q2 FY24 earnings.
52. On March 4, 2024, the Board’s Audit Committee held an in-person meeting at
Comtech’s Melville, New York office to discuss Comtech’s Q2 FY24 results, among other
things.
53. Peterman was one of the management attendees at this meeting.
54. Peterman attended this meeting in person.
55. During this meeting, Peterman and the other attendees received an oral
presentation from Comtech’s independent auditors and chief financial officer (“CFO”) about
Comtech’s Q2 FY24 Results.
56. At the meeting, the CFO reviewed the summary of Comtech’s Q2 FY24 financial
performance and the performance trends compared with Comtech’s two prior fiscal quarters.
57. At the same meeting, the CFO discussed the results, key transactions, and other
drivers of financial performance for Q2 FY24 .

 11
58. The CFO also reviewed, among other things, key highlights from Comtech’s
consolidated balance sheet and cash flows for Q2 FY24 and cash forecasts, as well as the status
of accounts receivable as of the end of Q2 FY24.
59. At the Audit Committee meeting, a written presentation, titled “Comtech
Presentation for Audit Committee: Fiscal Year 2024 Second Quarter,” was distributed to
Peterman and others in attendance.
60. Each page of the written presentation contained a header with the words
“PRIVATE AND CONFIDENTIAL – NOT FOR DISTRIBUTION” (capitalization in original)
and a footer with the words “Audit Committee Meeting 3/4/2024 (Privileged & Confidential).”
61. The written presentation contained detailed information about Comtech’s non-
public, forthcoming Q2 FY24 financial results, including multiple pages of excerpts from the
company’s forthcoming income statements to be published in Comtech’s Form 10-Q public
filing with the Commission.
62. These excerpts showed that Comtech’s net sales during Q2 FY24 were $134.2
million, a 12% decrease from the company’s $151.9 million in net sales the prior quarter.
63. These excerpts also showed that Comtech’s adjusted EBITDA (Earnings Before
Interest, Taxes, Depreciation, and Amortization) declined more than $3 million from the prior
quarter from $18.4 million to $15.1 million.
V. Comtech Terminated Peterman for Cause and Reminded Him of His Continuing
Confidentiality Obligation.
64. On March 11, 2024, Peterman was interviewed by Comtech’s outside counsel in
connection with an internal investigation.
65. During the interview, Peterman acknowledged that he had engaged in a sexual
relationship with a subordinate employee over the course of several months in 2023 and that he

 12
had failed to disclose the relationship to Comtech or its Board, including by omitting any
mention of this undisclosed sexual relationship in his responses to the Directors and Officers
Questionnaire that he signed on October 12, 2023. During the interview, Peterman also
acknowledged that in December 2023, he directed the subordinate employee to use his
credentials to log in and complete the online annual sexual harassment training required for all
Comtech employees.
66. On March 12, 2024, at approximately 5:00 p.m., the independent directors of
Comtech’s Board effected a Board resolution to terminate Peterman as CEO and chair of
Comtech for cause, effective immediately. The directors also appointed a new Board chair and
an interim CEO of Comtech.
67. At approximately 6:39 p.m. that evening, the new Board chair and an independent
director called Peterman and informed him of his termination for cause, effective immediately.
68. At approximately 7:11 p.m. that evening, Comtech disabled Peterman’s access to
Comtech’s computer network, systems, and email.
69. Later in the evening, at 11:51 p.m., counsel for the Audit Committee emailed
Peterman’s counsel a letter, dated the same day, from the new Board chair and addressed to
Peterman that confirmed Peterman’s termination (“Termination Letter”).
70. The Termination Letter stated that the Board terminated Peterman’s employment
“for Cause” because Peterman’s conduct constitute[d] “breach of fiduciary duty,” “dishonesty,”
and “material violation of the Company’s written policies or codes of conduct,” as set forth in
the definition of “Cause” in the Employment Agreement.
71. The Termination Letter also stated: “You are reminded that, notwithstanding the
termination of your employment, you remain bound to protect the Company’s [Comtech’s]

 13
confidential information.”
VI. Peterman Tried to Trade Ahead of Comtech’s Announcement of His Termination
and Did Trade Ahead of Comtech’s Earnings Announcement.
72. On Tuesday, March 12, 2024, between 7:33 p.m. and 9:22 p.m., Peterman logged
into the online system for his Joint Account three times.
73. At approximately 9:01 p.m. that night, Peterman called his financial advisor for
his Joint Account.
74. Approximately one minute later, Peterman sent a text message to the financial
advisor: “Call me as soon as you can. It’s fairly urgent. Thanks.”
75. Peterman and his f inancial advisor had three telephone conversations lasting more
than two minutes each beginning around 9:15 p.m.
76. At approximately 9:28 p.m. the same night, Peterman logged into the online
system for his Compensation Account.
77. Eight minutes later, at 9:36 p.m., Peterman emailed the financial advisor for his
Joint Account: “Please sell/liquidate all Comtech stock (CMTL) at the first opportunity in the
morning. This includes all CMTL holdings in [the Joint Account] and [the Compensation
Account].”
78. At approximately 11:17 p.m. the same night, Peterman logged into the online
system for his Compensation Account.
79.  A t approximately 11:20 p.m., Peterman electronically placed a market order to
sell all 8,241 shares of Comtech common stock held in his Compensation Account.
80. The next day, Wednesday, March 13, 2024, at approximately 9:00 a.m., Comtech
issued a press release announcing Peterman’s termination:
Ken Peterman...has been terminated as President and CEO and will cease
to serve on the Board. Mr. Peterman’s termination was for conduct

 14
unrelated to Comtech’s business strategy, financial results or previously
filed financial statements....The Company expects to report its financial
results and file its Form 10-Q for the quarter ended January 31, 2024, on
March 18, 2024.
81. Six minutes later, at approximately 9:06 a.m., Comtech filed a Form 8-K report,
announcing Peterman’s termination, with the Commission.
82. When the market opened that morning at 9:30 a.m., Comtech’s share price was
$5.61 per share, down from $5.76 per share at the close of the prior trading day.
83.  Peterman’s brokerage firm filled his order to sell all the Comtech shares in his
Compensation Account between 9:35 a.m.  and 10:00 a.m. that morning at prices ranging from
$5.21 per share to $4.71 per share.
84. Peterman’s gross proceeds for the sale of the 8,241 shares in his Compensation
Account were $40,712.07—a weighted average price of $4.94 per share.
85. Peterman’s net proceeds for the sale of 8,241 shares in his Compensation Account
were $40,454.54.
86. The same morning, March 13, 2024, at 10:40 a.m., Peterman’s financial advisor
responded to Peterman’s email from the night before at 9:36 p.m.: “I do not have access to sell
anything at [the brokerage firm managing the Compensation Account]. You will either need to
contact them yourself and ask them to liquidate your shares or put me in contact with them to
determine how best to get the shares transferred to [the Joint Account] so that I can execute a
sale. Please advise.”
87. One minute later, at 10:41 a.m., Peterman called his financial advisor.
88. At 10:44 a.m., Peterman’s financial advisor called the brokerage firm that held
Peterman’s Joint Account.

 15
89. During this recorded telephone call, the financial advisor told a representative at
the brokerage firm that held the Joint Account that Peterman wanted to sell all of the Comtech
shares in that account, which totaled 49,400 shares of Comtech stock.
90. Approximately three minutes into the call, the financial advisor dialed Peterman
into the call.
91. On the call, Peterman told the brokerage firm representative that he had departed
Comtech one day earlier, but Peterman did not tell the representative that he was still subject to
two Comtech trading blackouts that survived his termination or that he had confidential
information about Comtech’s forthcoming Q2 FY24 earnings.
92. After this telephone call, at 10:53 a.m., the brokerage firm representative emailed
the financial advisor: “Attached are the forms needed for affiliates to sell control shares under
Rule 144.... Once the documents are received, we will reach out to the Issuer’s legal counsel for
pre-clearance & eligibility to sell. Approvals may not be the same day and may take 3-5 business
days depending on the company response time.”
93. Later on the morning of March 13, 2024, at 11:42 a.m., a representative of the
brokerage firm managing the Compensation Account emailed Comtech, with the subject line
“KEN A PETERMAN Trade,” and wrote: “Our Executive Services Team just informed us that
one of your participants Ken A. Peterman...has placed their own transaction.”
94. At 12:42 p.m., a Comtech employee responded to the email as follows: “Ken was
terminated yesterday as disclosed in an 8-K the company filed with the SEC this morning, and
didn’t receive permission from in-house counsel to trade.”
95. At 12:50 p.m., Peterman sent a text message to the financial advisor: “I signed the
release. Just checking in, everything moving ahead all all [sic] right?”

 16
96. At 2:37 p.m., the financial advisor responded to the brokerage firm
representative’s 10:53 a.m. email, copying Peterman: “Thank you for your assistance this
morning. Please see attached. Please contact Comtech as soon as possible.
97. Attached to the email was a form Peterman had signed at 11:53 a.m. that day,
which memorialized Peterman’s intent to sell all 49,400 shares of Comtech common stock from
the Joint Account.
98. Also attached to the email was a draft Form 144 to be filed with the Commission
reflecting the following Comtech securities to be sold by Peterman: 44,000 shares he had
acquired on January 11, 2023, through an open market purchase and 5,400 shares he had
acquired on June 13, 2023, through an open market purchase, for a total of 49,400 Comtech
shares.
99. On March 13, 2024, at 7:55 p.m., Comtech’s general counsel emailed Peterman
and others: “If you have received this email directly from me, please be advised that
we remain under a Special Blackout Period such that you may not trade Comtech shares.”
(emphasis in original).
100. When the market closed on March 13, 2024, Comtech’s stock priced closed at
$4.19 per share, a 27.3% drop from the prior trading day’s closing price.
101. On March 14, 2024, at 9:58 a.m., the brokerage firm representative emailed
Comtech: “We received [Peterman’s] request to sell up to 49,400 affiliate control shares under
Rule 144. We do understand that Mr. Peterman separated from the company very recently. SEC
regulations require transactions [to be] reported for former affiliates until they have ceased their
affiliated status for 3 months.”
102. The representative asked in his email: “[1] Is the affiliate pre-cleared with

 17
[Comtech] to sell shares under Rule 144?[;]” [2] Is the trading window currently open?[;] [and]
[3] When does the window close?”
103. On March 14, 2024, at 1:04 p.m., Comtech’s general counsel responded to the
representative’s email: “Please be advised that our Section 16 officers (of which Ken Peterman
was one). [sic] We have an active blackout in place prohibiting trades.”
104. The next day, Peterman’s brokerage firm issued him a check for $40,454.54, the
net proceeds of his sale of Comtech shares in his Compensation Account, and Peterman endorsed
and cashed the check on March 25, 2024.
105. On Monday, March 18, 2024, at 5:20 p.m., after the market closed, Comtech filed
its Form 10-Q, reporting the company’s Q2 FY24 results.
106. The Form 10-Q showed that Comtech had earned revenue of $134.2 million,
missing analyst estimates that it would earn $152.9 million in revenue for the quarter.
107. The Form 10-Q also showed that Comtech’s adjusted EBITDA was $15.1 million,
missing analyst estimates that it would be $18.7 million for the quarter.
108. Comtech’s stock price fell from $4.60 per share when the market closed on March
18, 2024, before the announcement, to $3.43 per share when the market closed on March 19,
2024, the day after the announcement—a stock price drop of 25.4%.
109. On March 19, 2024, at 11:10 a.m., the brokerage firm representative emailed
Comtech’s general counsel, writing: “[Peterman’s] advisor has requested we reach back out to
see if the blackout period has been lifted. If so, would you be able to provide answers to the
original due diligence questions? If not would you be able to provide me with an estimate on
when the window may open back up?”
110. In response, Comtech’s general counsel wrote: “The blackout period has not been

 18
lifted.... The client will be advised when the period is lifted.... The blackout period will not be
lifted until the non-public information in the possession of insiders has been cleared.”
111. Had Peterman succeeded in selling all 49,400 Comtech shares in his Joint
Account between March 13 and March 18, 2024—before Comtech announced its Q2 FY24
earnings on the evening of March 18—he would have avoided losses ranging from
approximately $34,580.00 to $110,463.34, based on the closing price of Comtech stock on
March 19, 2024.
CLAIM FOR RELIEF
Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
112. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 111.
113. Peterman, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly has (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one
or more untrue statements of a material fact or omitted to state one or more material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon other persons.
114. By reason of the foregoing, Peterman, directly or indirectly, singly or in concert,
has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C.
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

 19
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Peterman and his agents, servants, employees and attorneys and
all persons in active concert or participation with any of them from violating, directly or
indirectly, Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder [17
C.F.R. § 240.10b-5(b)];
II.
Ordering Peterman to disgorge all ill-gotten gains he received directly or indirectly, with
pre-judgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act
Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)];
III.
Ordering Peterman to pay civil monetary penalties pursuant to Exchange Act Section
21A [15 U.S.C. § 78u-1];
IV.
Permanently prohibiting Peterman from serving as an officer or director of any company
that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that
is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to
Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; and

 20
V.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND
 The Commission demands a trial by jury.

Dated:  New York, New York
December 11, 2024
/s/ Antonia M. Apps
ANTONIA M. APPS
REGIONAL DIRECTOR
Tejal D. Shah
Liora Sukhatme
Travis Hill
Mary Kay Dunning
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
212-336-5039 (Dunning)

ANTONIA M. APPS 
REGIONAL DIRECTOR 
Tejal D. Shah  
Liora Sukhatme 
Travis Hill 
Mary Kay Dunning 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street  
Suite 20-100 
New York, NY 10004-2616 
212-336-5039 (Dunning) 
[email protected] 
 
UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
KEN PETERMAN,    
  
                                             Defendant. 

 

 
 
COMPLAINT 
   
24 Civ. 8475 
 
   
JURY TRIAL DEMANDED 
  
           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendant Ken Peterman (“Peterman”), alleges as follows: 

SUMMARY 

1. Defendant Peterman—the former chief executive officer (“CEO”), chair of the 

Board of Directors (“Board”), and president of Comtech Telecommunications Corp. 

(“Comtech”)—engaged in insider trading by selling his Comtech stock on the basis of material 

non-public information about Comtech’s negative earnings results before Comtech publicly 

announced them.  

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 1 of 20 PageID #: 1



   

 2 

2. On March 4, 2024, Peterman attended a meeting of the Comtech Board’s Audit 

Committee and received confidential oral and written presentations. The presentations revealed 

that Comtech’s forthcoming financial results for the quarter that had ended on January 31, 2024 

(the second quarter of Comtech’s fiscal year 2024, or “Q2 FY24”) would show a 12% decrease 

in net sales from the prior quarter, among other negative earnings results. 

3. At the time, Comtech had two trading blackouts in effect (each for different 

reasons) that prohibited Peterman from trading in Comtech securities. One of the blackouts—a 

recurring quarterly trading blackout designed to prevent Comtech officers and directors from 

trading their Comtech shares while Comtech was finalizing its earnings results for the prior 

quarter but before it had publicly announced them—would continue until the second business 

day after Comtech’s public announcement of its earnings results for Q2 FY24. Peterman had 

previously certified that he had read the Comtech conduct policy that explained this blackout 

period, and his own remarks at the beginning of the policy underscored employees’ personal 

responsibility for complying with the conduct standards, including this blackout period.  

4. On the evening of March 12, 2024, two Comtech directors informed Peterman 

that the Board had terminated him for cause effective immediately.  

5. Hours later, Peterman tried to trade ahead of Comtech’s announcement of his 

termination by placing a market order to sell all 8,241 Comtech shares in his equity 

compensation management account (the “Compensation Account”).    

6. On Wednesday, March 13, 2024, at approximately 9:00 a.m., Comtech issued a 

press release announcing Peterman’s termination. 

 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 2 of 20 PageID #: 2



   

 3 

7. On Wednesday, March 13, 2024, at approximately 9:35 a.m., Peterman’s 

brokerage firm began selling the shares of Comtech stock in Peterman’s Compensation 

Account.1 Within 25 minutes, all of Peterman’s shares in this account had been sold for net 

proceeds of $40,454.54 at a weighted average price of $4.94 per share. On Monday, March 18, 

2024, after the market close, Comtech publicly filed its Form 10-Q announcing its negative 

earnings results for Q2 FY24.  

8. The next day, Comtech’s stock price closed at $3.43 per share, dropping 25.4% 

from the previous day’s closing price of $4.60 per share.  

9. By selling his Comtech stock with knowledge of Comtech’s forthcoming material 

non-public negative earnings results, Peterman breached his duty of trust and confidence to 

Comtech and its shareholders and avoided losses of approximately $12,445.44. Peterman would 

have avoided significantly more losses had he succeeded in his attempts to similarly sell 

additional shares of Comstock stock he held in a different account.  

VIOLATIONS 

10. By virtue of the foregoing conduct and as alleged further herein, Peterman 

violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. 

§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

11. Unless Peterman is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.  

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

12. The Commission brings this action pursuant to the authority conferred upon it by 

 
1  All times set forth herein are in Eastern Time.  

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 3 of 20 PageID #: 3



   

 4 

Exchange Act Sections 21(d) and 21A [15 U.S.C. §§ 78u(d) and 78u-1(a)].  

13. The Commission seeks a final judgment: (a) permanently enjoining Peterman 

from violating the federal securities laws and rules this Complaint alleges he has violated; 

(b) ordering Peterman to disgorge all ill-gotten gains he received as a result of the violations 

alleged herein and to pay prejudgment interest thereon, pursuant to Exchange Act Sections 

21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (c) ordering 

Peterman to pay civil money penalties pursuant to Exchange Act Section 21A [15 U.S.C. § 78u-

1]; (d) permanently prohibiting Peterman from serving as an officer or director of any company 

that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that 

is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to 

Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; and (e) ordering any other and further 

relief the Court may deem just and proper.  

JURISDICTION AND VENUE 

14. This Court has jurisdiction over this action pursuant to Exchange Act Section 27 

[15 U.S.C. § 78aa]. 

15. Peterman, directly and indirectly, has made use of the means or instrumentalities 

of interstate commerce or of the mails in connection with the transactions, acts, practices, and 

courses of business alleged herein. 

16. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa], 

because certain of the acts, practices, transactions, and courses of business constituting the 

violations alleged in this Complaint occurred in the Eastern District of New York. Among other 

things, Peterman received the material non-public earnings information at issue in this case at an 

in-person meeting in Melville, New York.  

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 4 of 20 PageID #: 4



   

 5 

DEFENDANT 

17. Peterman, age 67, resides in Encinitas, California. Peterman served as president 

and CEO of Comtech from August 10, 2022, until March 12, 2024, when he was terminated for 

cause. 

RELEVANT ENTITY 

18. Comtech is a Delaware-incorporated global technology company whose 

corporate headquarters were located in Melville, New York until March 2024, when Comtech 

relocated its corporate headquarters to Chandler, Arizona. Comtech provides terrestrial and 

wireless network solutions, next-generation 9-1-1 emergency services, satellite and space 

communications technologies, and cloud native capabilities to commercial and government 

customers. Comtech’s common stock is listed on the NASDAQ Stock Market LLC stock 

exchange and trades under the symbol “CMTL.” 

FACTS 

I. As Peterman Knew, He Had a Duty to Protect Comtech’s Confidential Information  
and to Refrain from Trading on Comtech’s Material Non-public Information.  

19. On May 10, 2022, Peterman was appointed to Comtech’s Board.  

20. On July 25, 2022, he was named chair of the Board.  

21. On August 10, 2022, Peterman was named president and CEO of Comtech.  

22. As Comtech’s CEO, chair of the Board, and president, Peterman owed a duty of 

trust and confidence to Comtech and its shareholders to maintain the confidentiality of 

Comtech’s material non-public information and to refrain from trading on it.  

23. On September 12, 2022, Comtech and Peterman entered into an employment 

agreement (“Employment Agreement”) that Peterman signed.  

24. The Employment Agreement made clear that Peterman would have access to 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 5 of 20 PageID #: 5



   

 6 

“Confidential Information,” defined as “information that constitutes trade secrets, is of a 

confidential nature, is of great value to [Comtech] or is the foundation on which the business of 

[Comtech] is predicated.”  

25. In the Employment Agreement, Peterman agreed not to disclose Confidential 

Information “during his employment and thereafter” to anyone other than Comtech’s employees 

or lawyers or others authorized by Comtech to receive Confidential Information. He also agreed 

not to “use for any purpose, other than the performance of [the Employment], any Confidential 

Information.”  

26. The Employment Agreement made clear that its provisions governing 

Confidential Information “survive[d] the termination, expiration or cancellation of [Peterman’s] 

employment.”  

27. In September 2022, Comtech issued and distributed to its employees its Standards 

of Business Conduct (“Conduct Standards”), a set of policies that applied to all employees of 

Comtech.   

28. The Conduct Standards contained an introductory message from Peterman 

underscoring each employee’s personal responsibility for complying with the standards:  

These Standards of Business Conduct are a guide to help all employees of 
Comtech live up to our high ethical standards…. At Comtech, each of us 
has the personal responsibility to make sure that our actions abide by these 
Standards of Business Conduct, as well as the specific laws and Company 
policies and procedures that apply to our roles. 

29. The Conduct Standards prohibited trading in Comtech securities while in 

possession of material non-public information.  

30. Specifically, in the section titled “Confidential Information and Securities Law,” 

the Conduct Standards stated:  

‘Insider trading’ is the purchase or sale of a publicly traded security while 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 6 of 20 PageID #: 6



   

 7 

in possession of important non-public information about the issuer of the 
security. ‘Tipping’ is communicating such information to anyone who 
might use it to purchase or sell securities. No employee may engage in 
either insider trading or tipping. 

Employees who have questions pertaining to the sale or purchase of 
Company securities under circumstances where confidential information 
or securities laws may be involved should consult with the Company’s 
Corporate Chief Financial Officer or Corporate Compliance Officer. 
When in doubt, information obtained as an employee of the Company 
should be presumed to be important and not public. 

31. During Peterman’s employment at Comtech, Comtech required all of its 

employees each year to complete online training about the Conduct Standards and “to 

electronically certify that they have received and read the [Conduct Standards] and that they have 

and will abide by these [Conduct Standards] as well as the specific laws and Company policies 

and procedures that apply to them and their roles.”  

32. The online training about the Conduct Standards contained an accompanying 

quiz. The quiz contained a question requiring employees to acknowledge and certify that they 

had received and read the Conduct Standards, including the provisions relating to insider trading, 

and that they had and would abide by the Conduct Standards, “as well as the specific laws and 

Company policies and procedures that apply to them and their roles.”   

33. The quiz also alerted employees that the “online electronic acknowledgement and 

certification of the [Conduct] Standards is considered equivalent to an actual written signature” 

and “is considered legally binding.”   

34. On December 26, 2023, Peterman completed and certified that he had completed 

the “Standards of Business Conduct Training FY 2024” for Comtech’s fiscal year 2024.  

II. Peterman Obtained Shares of Comtech Stock Through His Employment.  

35. Pursuant to the Employment Agreement, Comtech granted Peterman 42,518 

Comtech restricted stock units that vested on an annual basis over three years and a $1 million 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 7 of 20 PageID #: 7



   

 8 

bonus to purchase Comtech stock in the open market. 

36. On January 11, 2023, Peterman used his $1 million signing bonus to purchase 

44,000 shares of Comtech common stock in the open market, and on June 13, 2023, he 

purchased another 5,400 shares.  

37. Following these purchases, Peterman owned a total of 49,400 shares of Comtech 

common stock, which he held in an account under his and his wife’s names at a large brokerage 

firm (the “Joint Account”). 

38. As the CEO of Comtech, Peterman was an “affiliate” of Comtech for purposes of 

Rule 144 promulgated under the Securities Act of 1933.  

39. As such, the Comtech shares Peterman held in the Joint Account were considered 

control securities under Rule 144. 

40. Therefore, the brokerage firm that held Peterman’s Joint Account would not allow 

Peterman to sell the Comtech shares in this account without prior written approval from 

Comtech. 

41. On September 12, 2023, Peterman’s one-year employment anniversary, Comtech 

released 14,173 restricted stock units to Peterman.  

42. Of this amount, Comtech withheld 5,932 restricted stock units to cover 

Peterman’s tax liability and converted 8,241 restricted stock units into 8,241 shares of Comtech 

common stock.  

43. Peterman held these 8,241 Comtech shares in his Compensation Account, held at 

a different brokerage firm from the one that held his Joint Account.  

III. Peterman Was Subject to Two Trading Blackout Periods.  

44. The Conduct Standards mandated that “to reduce the risk of inadvertent violations 

of securities laws,” Comtech’s officers and directors were prohibited from trading in Comtech 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 8 of 20 PageID #: 8



   

 9 

securities other than during certain open “window periods” tied to the Company’s fiscal year 

quarters.  

45. As the Conduct Standards explained, each trading window period—the period 

when Comtech’s officers and directors could trade in Comtech securities—opened on the second 

business day after Comtech’s release of earnings results for the prior fiscal quarter. The trading 

window closed ten calendar days before the end of the third month of the then-current fiscal 

quarter.  

46. In addition to being subject to the quarterly trading windows set forth in the 

Conduct Standards, Comtech employees were also subject to special trading blackout periods 

from time to time. 

47. On October 13, 2023, Peterman received an email from Comtech’s general 

counsel notifying him that Peterman and other Comtech officers and directors were subject to a 

special trading blackout period arising from two confidential Comtech projects (“Special 

Blackout Period”):  

While Comtech routinely opens the Trading Window for its Section 16 
insiders on the second business day following an Earnings Release, we are 
instead imposing a Special Blackout Period, effective immediately, to 
avoid any improper transactions while there are nonpublic developments 
that could be considered material for insider trading law purposes. During 
this period, you may not trade in Comtech securities without express 
coordination with the Chief Legal Officer and Corporate Secretary and 
you may not disclose the existence of the Special Blackout Period to any 
other person.  

We will contact you when the Special Blackout Period is concluded. In the 
interim, please direct your questions to me directly.   

48. Approximately four months later, on February 8, 2024, Comtech’s general 

counsel emailed Peterman and others to remind them of their ongoing obligation to refrain from 

trading in Comtech securities due to the Special Blackout Period:  

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 9 of 20 PageID #: 9



   

 10 

The purpose of this email is to alert you to your ongoing obligations in 
connection with [the confidential projects]. Specifically, the Special 
Blackout Period that was announced on or about October 13, 
2023…remains in effect until you are notified otherwise in 
writing. Accordingly, you may not trade in Comtech securities without 
first coordinating with the CLO [Chief Legal Officer] and Corporate 
Secretary.   

49. The Special Blackout Period remained in effect through at least April 1, 2024.  

IV. Peterman Learned of Comtech’s Confidential Q2 FY24 Negative Earnings Results  
Two Weeks Before Comtech Publicly Announced Them.  

50. On January 31, 2024, Comtech’s Q2 FY24 ended.  

51. Under the Conduct Standards, the quarterly trading window for Comtech officers 

and directors, including Peterman, closed ten calendar days prior to the end of the fiscal quarter, 

on approximately January 21, 2024, and it would remain closed until the second business day 

following the release of Q2 FY24 earnings.   

52. On March 4, 2024, the Board’s Audit Committee held an in-person meeting at 

Comtech’s Melville, New York office to discuss Comtech’s Q2 FY24 results, among other 

things.  

53. Peterman was one of the management attendees at this meeting. 

54. Peterman attended this meeting in person.  

55. During this meeting, Peterman and the other attendees received an oral 

presentation from Comtech’s independent auditors and chief financial officer (“CFO”) about 

Comtech’s Q2 FY24 Results.  

56. At the meeting, the CFO reviewed the summary of Comtech’s Q2 FY24 financial 

performance and the performance trends compared with Comtech’s two prior fiscal quarters.  

57. At the same meeting, the CFO discussed the results, key transactions, and other 

drivers of financial performance for Q2 FY24 .  

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 10 of 20 PageID #: 10



   

 11 

58. The CFO also reviewed, among other things, key highlights from Comtech’s 

consolidated balance sheet and cash flows for Q2 FY24 and cash forecasts, as well as the status 

of accounts receivable as of the end of Q2 FY24.  

59. At the Audit Committee meeting, a written presentation, titled “Comtech 

Presentation for Audit Committee: Fiscal Year 2024 Second Quarter,” was distributed to 

Peterman and others in attendance.  

60. Each page of the written presentation contained a header with the words 

“PRIVATE AND CONFIDENTIAL – NOT FOR DISTRIBUTION” (capitalization in original) 

and a footer with the words “Audit Committee Meeting 3/4/2024 (Privileged & Confidential).”  

61. The written presentation contained detailed information about Comtech’s non-

public, forthcoming Q2 FY24 financial results, including multiple pages of excerpts from the 

company’s forthcoming income statements to be published in Comtech’s Form 10-Q public 

filing with the Commission.  

62. These excerpts showed that Comtech’s net sales during Q2 FY24 were $134.2 

million, a 12% decrease from the company’s $151.9 million in net sales the prior quarter.  

63. These excerpts also showed that Comtech’s adjusted EBITDA (Earnings Before 

Interest, Taxes, Depreciation, and Amortization) declined more than $3 million from the prior 

quarter from $18.4 million to $15.1 million.  

V. Comtech Terminated Peterman for Cause and Reminded Him of His Continuing 
Confidentiality Obligation. 

64. On March 11, 2024, Peterman was interviewed by Comtech’s outside counsel in 

connection with an internal investigation.  

65. During the interview, Peterman acknowledged that he had engaged in a sexual 

relationship with a subordinate employee over the course of several months in 2023 and that he 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 11 of 20 PageID #: 11



   

 12 

had failed to disclose the relationship to Comtech or its Board, including by omitting any 

mention of this undisclosed sexual relationship in his responses to the Directors and Officers 

Questionnaire that he signed on October 12, 2023. During the interview, Peterman also 

acknowledged that in December 2023, he directed the subordinate employee to use his 

credentials to log in and complete the online annual sexual harassment training required for all 

Comtech employees. 

66. On March 12, 2024, at approximately 5:00 p.m., the independent directors of 

Comtech’s Board effected a Board resolution to terminate Peterman as CEO and chair of 

Comtech for cause, effective immediately. The directors also appointed a new Board chair and 

an interim CEO of Comtech. 

67. At approximately 6:39 p.m. that evening, the new Board chair and an independent 

director called Peterman and informed him of his termination for cause, effective immediately.  

68. At approximately 7:11 p.m. that evening, Comtech disabled Peterman’s access to 

Comtech’s computer network, systems, and email. 

69. Later in the evening, at 11:51 p.m., counsel for the Audit Committee emailed 

Peterman’s counsel a letter, dated the same day, from the new Board chair and addressed to 

Peterman that confirmed Peterman’s termination (“Termination Letter”).  

70. The Termination Letter stated that the Board terminated Peterman’s employment 

“for Cause” because Peterman’s conduct constitute[d] “breach of fiduciary duty,” “dishonesty,” 

and “material violation of the Company’s written policies or codes of conduct,” as set forth in 

the definition of “Cause” in the Employment Agreement.  

71. The Termination Letter also stated: “You are reminded that, notwithstanding the 

termination of your employment, you remain bound to protect the Company’s [Comtech’s] 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 12 of 20 PageID #: 12



   

 13 

confidential information.” 

VI. Peterman Tried to Trade Ahead of Comtech’s Announcement of His Termination 
and Did Trade Ahead of Comtech’s Earnings Announcement. 

72. On Tuesday, March 12, 2024, between 7:33 p.m. and 9:22 p.m., Peterman logged 

into the online system for his Joint Account three times.  

73. At approximately 9:01 p.m. that night, Peterman called his financial advisor for 

his Joint Account. 

74. Approximately one minute later, Peterman sent a text message to the financial 

advisor: “Call me as soon as you can. It’s fairly urgent. Thanks.”   

75. Peterman and his financial advisor had three telephone conversations lasting more 

than two minutes each beginning around 9:15 p.m. 

76. At approximately 9:28 p.m. the same night, Peterman logged into the online 

system for his Compensation Account. 

77. Eight minutes later, at 9:36 p.m., Peterman emailed the financial advisor for his 

Joint Account: “Please sell/liquidate all Comtech stock (CMTL) at the first opportunity in the 

morning. This includes all CMTL holdings in [the Joint Account] and [the Compensation 

Account].”  

78. At approximately 11:17 p.m. the same night, Peterman logged into the online 

system for his Compensation Account. 

79.  At approximately 11:20 p.m., Peterman electronically placed a market order to 

sell all 8,241 shares of Comtech common stock held in his Compensation Account.  

80. The next day, Wednesday, March 13, 2024, at approximately 9:00 a.m., Comtech 

issued a press release announcing Peterman’s termination:  

Ken Peterman…has been terminated as President and CEO and will cease 
to serve on the Board. Mr. Peterman’s termination was for conduct 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 13 of 20 PageID #: 13



   

 14 

unrelated to Comtech’s business strategy, financial results or previously 
filed financial statements….The Company expects to report its financial 
results and file its Form 10-Q for the quarter ended January 31, 2024, on 
March 18, 2024.  

81. Six minutes later, at approximately 9:06 a.m., Comtech filed a Form 8-K report, 

announcing Peterman’s termination, with the Commission.  

82. When the market opened that morning at 9:30 a.m., Comtech’s share price was 

$5.61 per share, down from $5.76 per share at the close of the prior trading day. 

83.  Peterman’s brokerage firm filled his order to sell all the Comtech shares in his 

Compensation Account between 9:35 a.m. and 10:00 a.m. that morning at prices ranging from 

$5.21 per share to $4.71 per share.     

84. Peterman’s gross proceeds for the sale of the 8,241 shares in his Compensation 

Account were $40,712.07—a weighted average price of $4.94 per share.  

85. Peterman’s net proceeds for the sale of 8,241 shares in his Compensation Account 

were $40,454.54.  

86. The same morning, March 13, 2024, at 10:40 a.m., Peterman’s financial advisor 

responded to Peterman’s email from the night before at 9:36 p.m.: “I do not have access to sell 

anything at [the brokerage firm managing the Compensation Account]. You will either need to 

contact them yourself and ask them to liquidate your shares or put me in contact with them to 

determine how best to get the shares transferred to [the Joint Account] so that I can execute a 

sale. Please advise.” 

87. One minute later, at 10:41 a.m., Peterman called his financial advisor. 

88. At 10:44 a.m., Peterman’s financial advisor called the brokerage firm that held 

Peterman’s Joint Account.  

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 14 of 20 PageID #: 14



   

 15 

89. During this recorded telephone call, the financial advisor told a representative at 

the brokerage firm that held the Joint Account that Peterman wanted to sell all of the Comtech 

shares in that account, which totaled 49,400 shares of Comtech stock.  

90. Approximately three minutes into the call, the financial advisor dialed Peterman 

into the call.  

91. On the call, Peterman told the brokerage firm representative that he had departed 

Comtech one day earlier, but Peterman did not tell the representative that he was still subject to 

two Comtech trading blackouts that survived his termination or that he had confidential 

information about Comtech’s forthcoming Q2 FY24 earnings.  

92. After this telephone call, at 10:53 a.m., the brokerage firm representative emailed 

the financial advisor: “Attached are the forms needed for affiliates to sell control shares under 

Rule 144…. Once the documents are received, we will reach out to the Issuer’s legal counsel for 

pre-clearance & eligibility to sell. Approvals may not be the same day and may take 3-5 business 

days depending on the company response time.”    

93. Later on the morning of March 13, 2024, at 11:42 a.m., a representative of the 

brokerage firm managing the Compensation Account emailed Comtech, with the subject line 

“KEN A PETERMAN Trade,” and wrote: “Our Executive Services Team just informed us that 

one of your participants Ken A. Peterman…has placed their own transaction.” 

94. At 12:42 p.m., a Comtech employee responded to the email as follows: “Ken was 

terminated yesterday as disclosed in an 8-K the company filed with the SEC this morning, and 

didn’t receive permission from in-house counsel to trade.” 

95. At 12:50 p.m., Peterman sent a text message to the financial advisor: “I signed the 

release. Just checking in, everything moving ahead all all [sic] right?” 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 15 of 20 PageID #: 15



   

 16 

96. At 2:37 p.m., the financial advisor responded to the brokerage firm 

representative’s 10:53 a.m. email, copying Peterman: “Thank you for your assistance this 

morning. Please see attached. Please contact Comtech as soon as possible. 

97. Attached to the email was a form Peterman had signed at 11:53 a.m. that day, 

which memorialized Peterman’s intent to sell all 49,400 shares of Comtech common stock from 

the Joint Account.  

98. Also attached to the email was a draft Form 144 to be filed with the Commission 

reflecting the following Comtech securities to be sold by Peterman: 44,000 shares he had 

acquired on January 11, 2023, through an open market purchase and 5,400 shares he had 

acquired on June 13, 2023, through an open market purchase, for a total of 49,400 Comtech 

shares. 

99. On March 13, 2024, at 7:55 p.m., Comtech’s general counsel emailed Peterman 

and others: “If you have received this email directly from me, please be advised that 

we remain under a Special Blackout Period such that you may not trade Comtech shares.” 

(emphasis in original). 

100. When the market closed on March 13, 2024, Comtech’s stock priced closed at 

$4.19 per share, a 27.3% drop from the prior trading day’s closing price.  

101. On March 14, 2024, at 9:58 a.m., the brokerage firm representative emailed 

Comtech: “We received [Peterman’s] request to sell up to 49,400 affiliate control shares under 

Rule 144. We do understand that Mr. Peterman separated from the company very recently. SEC 

regulations require transactions [to be] reported for former affiliates until they have ceased their 

affiliated status for 3 months.” 

102. The representative asked in his email: “[1] Is the affiliate pre-cleared with 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 16 of 20 PageID #: 16



   

 17 

[Comtech] to sell shares under Rule 144?[;]” [2] Is the trading window currently open?[;] [and] 

[3] When does the window close?” 

103. On March 14, 2024, at 1:04 p.m., Comtech’s general counsel responded to the 

representative’s email: “Please be advised that our Section 16 officers (of which Ken Peterman 

was one). [sic] We have an active blackout in place prohibiting trades.” 

104. The next day, Peterman’s brokerage firm issued him a check for $40,454.54, the 

net proceeds of his sale of Comtech shares in his Compensation Account, and Peterman endorsed 

and cashed the check on March 25, 2024. 

105. On Monday, March 18, 2024, at 5:20 p.m., after the market closed, Comtech filed 

its Form 10-Q, reporting the company’s Q2 FY24 results.  

106. The Form 10-Q showed that Comtech had earned revenue of $134.2 million, 

missing analyst estimates that it would earn $152.9 million in revenue for the quarter.  

107. The Form 10-Q also showed that Comtech’s adjusted EBITDA was $15.1 million, 

missing analyst estimates that it would be $18.7 million for the quarter.   

108. Comtech’s stock price fell from $4.60 per share when the market closed on March 

18, 2024, before the announcement, to $3.43 per share when the market closed on March 19, 

2024, the day after the announcement—a stock price drop of 25.4%.    

109. On March 19, 2024, at 11:10 a.m., the brokerage firm representative emailed 

Comtech’s general counsel, writing: “[Peterman’s] advisor has requested we reach back out to 

see if the blackout period has been lifted. If so, would you be able to provide answers to the 

original due diligence questions? If not would you be able to provide me with an estimate on 

when the window may open back up?” 

110. In response, Comtech’s general counsel wrote: “The blackout period has not been 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 17 of 20 PageID #: 17



   

 18 

lifted…. The client will be advised when the period is lifted…. The blackout period will not be 

lifted until the non-public information in the possession of insiders has been cleared.” 

111. Had Peterman succeeded in selling all 49,400 Comtech shares in his Joint 

Account between March 13 and March 18, 2024—before Comtech announced its Q2 FY24 

earnings on the evening of March 18—he would have avoided losses ranging from 

approximately $34,580.00 to $110,463.34, based on the closing price of Comtech stock on 

March 19, 2024.  

CLAIM FOR RELIEF 
Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

112. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 111. 

113. Peterman, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly has (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one 

or more untrue statements of a material fact or omitted to state one or more material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

114. By reason of the foregoing, Peterman, directly or indirectly, singly or in concert, 

has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 18 of 20 PageID #: 18



   

 19 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Peterman and his agents, servants, employees and attorneys and 

all persons in active concert or participation with any of them from violating, directly or 

indirectly, Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder [17 

C.F.R. § 240.10b-5(b)]; 

II. 

Ordering Peterman to disgorge all ill-gotten gains he received directly or indirectly, with 

pre-judgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act 

Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)]; 

III. 

Ordering Peterman to pay civil monetary penalties pursuant to Exchange Act Section 

21A [15 U.S.C. § 78u-1];  

IV. 

Permanently prohibiting Peterman from serving as an officer or director of any company 

that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that 

is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to 

Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; and 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 19 of 20 PageID #: 19



   

 20 

V. 

Granting any other and further relief this Court may deem just and proper.  

JURY DEMAND 

 The Commission demands a trial by jury.  

 
 
Dated: New York, New York 

December 11, 2024 
/s/ Antonia M. Apps   
ANTONIA M. APPS  
REGIONAL DIRECTOR  
Tejal D. Shah  
Liora Sukhatme 
Travis Hill 
Mary Kay Dunning 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street  
Suite 20-100 
New York, NY 10004-2616 
212-336-5039 (Dunning) 

 
 

Case 2:24-cv-08475     Document 1     Filed 12/11/24     Page 20 of 20 PageID #: 20


	antonia M. apps
	Regional Director
	Tejal D. Shah
	Liora Sukhatme
	Travis Hill
	Mary Kay Dunning
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street
	Suite 20-100
	212-336-5039 (Dunning)
	[email protected]
	Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against Defendant Ken Peterman (“Peterman”), alleges as follows:
	SUMMARY
	1. Defendant Peterman—the former chief executive officer (“CEO”), chair of the Board of Directors (“Board”), and president of Comtech Telecommunications Corp. (“Comtech”)—engaged in insider trading by selling his Comtech stock on the basis of material...
	2. On March 4, 2024, Peterman attended a meeting of the Comtech Board’s Audit Committee and received confidential oral and written presentations. The presentations revealed that Comtech’s forthcoming financial results for the quarter that had ended on...
	3. At the time, Comtech had two trading blackouts in effect (each for different reasons) that prohibited Peterman from trading in Comtech securities. One of the blackouts—a recurring quarterly trading blackout designed to prevent Comtech officers and ...
	4. On the evening of March 12, 2024, two Comtech directors informed Peterman that the Board had terminated him for cause effective immediately.
	5. Hours later, Peterman tried to trade ahead of Comtech’s announcement of his termination by placing a market order to sell all 8,241 Comtech shares in his equity compensation management account (the “Compensation Account”).
	6. On Wednesday, March 13, 2024, at approximately 9:00 a.m., Comtech issued a press release announcing Peterman’s termination.
	7. On Wednesday, March 13, 2024, at approximately 9:35 a.m., Peterman’s brokerage firm began selling the shares of Comtech stock in Peterman’s Compensation Account.0F  Within 25 minutes, all of Peterman’s shares in this account had been sold for net p...
	8. The next day, Comtech’s stock price closed at $3.43 per share, dropping 25.4% from the previous day’s closing price of $4.60 per share.
	9. By selling his Comtech stock with knowledge of Comtech’s forthcoming material non-public negative earnings results, Peterman breached his duty of trust and confidence to Comtech and its shareholders and avoided losses of approximately $12,445.44. P...
	VIOLATIONS
	10. By virtue of the foregoing conduct and as alleged further herein, Peterman violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
	11. Unless Peterman is restrained and enjoined, he will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.
	NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
	12. The Commission brings this action pursuant to the authority conferred upon it by Exchange Act Sections 21(d) and 21A [15 U.S.C. §§ 78u(d) and 78u-1(a)].
	13. The Commission seeks a final judgment: (a) permanently enjoining Peterman from violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering Peterman to disgorge all ill-gotten gains he received as a result o...
	JURISDICTION AND VENUE
	14. This Court has jurisdiction over this action pursuant to Exchange Act Section 27 [15 U.S.C. § 78aa].
	15. Peterman, directly and indirectly, has made use of the means or instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, practices, and courses of business alleged herein.
	16. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa], because certain of the acts, practices, transactions, and courses of business constituting the violations alleged in this Complaint occurred in the Eastern District of N...
	DEFENDANT
	17. Peterman, age 67, resides in Encinitas, California. Peterman served as president and CEO of Comtech from August 10, 2022, until March 12, 2024, when he was terminated for cause.
	RELEVANT ENTITY
	18. Comtech is a Delaware-incorporated global technology company whose corporate headquarters were located in Melville, New York until March 2024, when Comtech relocated its corporate headquarters to Chandler, Arizona. Comtech provides terrestrial and...
	19. On May 10, 2022, Peterman was appointed to Comtech’s Board.
	20. On July 25, 2022, he was named chair of the Board.
	21. On August 10, 2022, Peterman was named president and CEO of Comtech.
	22. As Comtech’s CEO, chair of the Board, and president, Peterman owed a duty of trust and confidence to Comtech and its shareholders to maintain the confidentiality of Comtech’s material non-public information and to refrain from trading on it.
	27. In September 2022, Comtech issued and distributed to its employees its Standards of Business Conduct (“Conduct Standards”), a set of policies that applied to all employees of Comtech.
	28. The Conduct Standards contained an introductory message from Peterman underscoring each employee’s personal responsibility for complying with the standards:
	These Standards of Business Conduct are a guide to help all employees of Comtech live up to our high ethical standards…. At Comtech, each of us has the personal responsibility to make sure that our actions abide by these Standards of Business Conduct,...
	29. The Conduct Standards prohibited trading in Comtech securities while in possession of material non-public information.
	30. Specifically, in the section titled “Confidential Information and Securities Law,” the Conduct Standards stated:
	‘Insider trading’ is the purchase or sale of a publicly traded security while in possession of important non-public information about the issuer of the security. ‘Tipping’ is communicating such information to anyone who might use it to purchase or sel...
	Employees who have questions pertaining to the sale or purchase of Company securities under circumstances where confidential information or securities laws may be involved should consult with the Company’s Corporate Chief Financial Officer or Corporat...
	31. During Peterman’s employment at Comtech, Comtech required all of its employees each year to complete online training about the Conduct Standards and “to electronically certify that they have received and read the [Conduct Standards] and that they ...
	32. The online training about the Conduct Standards contained an accompanying quiz. The quiz contained a question requiring employees to acknowledge and certify that they had received and read the Conduct Standards, including the provisions relating t...
	33. The quiz also alerted employees that the “online electronic acknowledgement and certification of the [Conduct] Standards is considered equivalent to an actual written signature” and “is considered legally binding.”
	34. On December 26, 2023, Peterman completed and certified that he had completed the “Standards of Business Conduct Training FY 2024” for Comtech’s fiscal year 2024.
	38. As the CEO of Comtech, Peterman was an “affiliate” of Comtech for purposes of Rule 144 promulgated under the Securities Act of 1933.
	39. As such, the Comtech shares Peterman held in the Joint Account were considered control securities under Rule 144.
	40. Therefore, the brokerage firm that held Peterman’s Joint Account would not allow Peterman to sell the Comtech shares in this account without prior written approval from Comtech.
	III. Peterman Was Subject to Two Trading Blackout Periods.
	44. The Conduct Standards mandated that “to reduce the risk of inadvertent violations of securities laws,” Comtech’s officers and directors were prohibited from trading in Comtech securities other than during certain open “window periods” tied to the ...
	45. As the Conduct Standards explained, each trading window period—the period when Comtech’s officers and directors could trade in Comtech securities—opened on the second business day after Comtech’s release of earnings results for the prior fiscal qu...
	46. In addition to being subject to the quarterly trading windows set forth in the Conduct Standards, Comtech employees were also subject to special trading blackout periods from time to time.
	47. On October 13, 2023, Peterman received an email from Comtech’s general counsel notifying him that Peterman and other Comtech officers and directors were subject to a special trading blackout period arising from two confidential Comtech projects (“...
	While Comtech routinely opens the Trading Window for its Section 16 insiders on the second business day following an Earnings Release, we are instead imposing a Special Blackout Period, effective immediately, to avoid any improper transactions while t...
	We will contact you when the Special Blackout Period is concluded. In the interim, please direct your questions to me directly.
	48. Approximately four months later, on February 8, 2024, Comtech’s general counsel emailed Peterman and others to remind them of their ongoing obligation to refrain from trading in Comtech securities due to the Special Blackout Period:
	The purpose of this email is to alert you to your ongoing obligations in connection with [the confidential projects]. Specifically, the Special Blackout Period that was announced on or about October 13, 2023…remains in effect until you are notified ot...
	49. The Special Blackout Period remained in effect through at least April 1, 2024.
	IV. Peterman Learned of Comtech’s Confidential Q2 FY24 Negative Earnings Results
	Two Weeks Before Comtech Publicly Announced Them.
	50. On January 31, 2024, Comtech’s Q2 FY24 ended.
	51. Under the Conduct Standards, the quarterly trading window for Comtech officers and directors, including Peterman, closed ten calendar days prior to the end of the fiscal quarter, on approximately January 21, 2024, and it would remain closed until ...
	52. On March 4, 2024, the Board’s Audit Committee held an in-person meeting at Comtech’s Melville, New York office to discuss Comtech’s Q2 FY24 results, among other things.
	53. Peterman was one of the management attendees at this meeting.
	54. Peterman attended this meeting in person.
	55. During this meeting, Peterman and the other attendees received an oral presentation from Comtech’s independent auditors and chief financial officer (“CFO”) about Comtech’s Q2 FY24 Results.
	56. At the meeting, the CFO reviewed the summary of Comtech’s Q2 FY24 financial performance and the performance trends compared with Comtech’s two prior fiscal quarters.
	57. At the same meeting, the CFO discussed the results, key transactions, and other drivers of financial performance for Q2 FY24 .
	58. The CFO also reviewed, among other things, key highlights from Comtech’s consolidated balance sheet and cash flows for Q2 FY24 and cash forecasts, as well as the status of accounts receivable as of the end of Q2 FY24.
	59. At the Audit Committee meeting, a written presentation, titled “Comtech Presentation for Audit Committee: Fiscal Year 2024 Second Quarter,” was distributed to Peterman and others in attendance.
	60. Each page of the written presentation contained a header with the words “PRIVATE AND CONFIDENTIAL – NOT FOR DISTRIBUTION” (capitalization in original) and a footer with the words “Audit Committee Meeting 3/4/2024 (Privileged & Confidential).”
	61. The written presentation contained detailed information about Comtech’s non-public, forthcoming Q2 FY24 financial results, including multiple pages of excerpts from the company’s forthcoming income statements to be published in Comtech’s Form 10-Q...
	62. These excerpts showed that Comtech’s net sales during Q2 FY24 were $134.2 million, a 12% decrease from the company’s $151.9 million in net sales the prior quarter.
	63. These excerpts also showed that Comtech’s adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) declined more than $3 million from the prior quarter from $18.4 million to $15.1 million.
	V. Comtech Terminated Peterman for Cause and Reminded Him of His Continuing Confidentiality Obligation.
	64. On March 11, 2024, Peterman was interviewed by Comtech’s outside counsel in connection with an internal investigation.
	65. During the interview, Peterman acknowledged that he had engaged in a sexual relationship with a subordinate employee over the course of several months in 2023 and that he had failed to disclose the relationship to Comtech or its Board, including b...
	66. On March 12, 2024, at approximately 5:00 p.m., the independent directors of Comtech’s Board effected a Board resolution to terminate Peterman as CEO and chair of Comtech for cause, effective immediately. The directors also appointed a new Board ch...
	67. At approximately 6:39 p.m. that evening, the new Board chair and an independent director called Peterman and informed him of his termination for cause, effective immediately.
	68. At approximately 7:11 p.m. that evening, Comtech disabled Peterman’s access to Comtech’s computer network, systems, and email.
	69. Later in the evening, at 11:51 p.m., counsel for the Audit Committee emailed Peterman’s counsel a letter, dated the same day, from the new Board chair and addressed to Peterman that confirmed Peterman’s termination (“Termination Letter”).
	70. The Termination Letter stated that the Board terminated Peterman’s employment “for Cause” because Peterman’s conduct constitute[d] “breach of fiduciary duty,” “dishonesty,” and “material violation of the Company’s written policies or codes of cond...
	71. The Termination Letter also stated: “You are reminded that, notwithstanding the termination of your employment, you remain bound to protect the Company’s [Comtech’s] confidential information.”
	VI. Peterman Tried to Trade Ahead of Comtech’s Announcement of His Termination and Did Trade Ahead of Comtech’s Earnings Announcement.
	72. On Tuesday, March 12, 2024, between 7:33 p.m. and 9:22 p.m., Peterman logged into the online system for his Joint Account three times.
	73. At approximately 9:01 p.m. that night, Peterman called his financial advisor for his Joint Account.
	74. Approximately one minute later, Peterman sent a text message to the financial advisor: “Call me as soon as you can. It’s fairly urgent. Thanks.”
	75. Peterman and his financial advisor had three telephone conversations lasting more than two minutes each beginning around 9:15 p.m.
	76. At approximately 9:28 p.m. the same night, Peterman logged into the online system for his Compensation Account.
	77. Eight minutes later, at 9:36 p.m., Peterman emailed the financial advisor for his Joint Account: “Please sell/liquidate all Comtech stock (CMTL) at the first opportunity in the morning. This includes all CMTL holdings in [the Joint Account] and [t...
	78. At approximately 11:17 p.m. the same night, Peterman logged into the online system for his Compensation Account.
	79.  At approximately 11:20 p.m., Peterman electronically placed a market order to sell all 8,241 shares of Comtech common stock held in his Compensation Account.
	80. The next day, Wednesday, March 13, 2024, at approximately 9:00 a.m., Comtech issued a press release announcing Peterman’s termination:
	Ken Peterman…has been terminated as President and CEO and will cease to serve on the Board. Mr. Peterman’s termination was for conduct unrelated to Comtech’s business strategy, financial results or previously filed financial statements….The Company ex...
	81. Six minutes later, at approximately 9:06 a.m., Comtech filed a Form 8-K report, announcing Peterman’s termination, with the Commission.
	82. When the market opened that morning at 9:30 a.m., Comtech’s share price was $5.61 per share, down from $5.76 per share at the close of the prior trading day.
	83.  Peterman’s brokerage firm filled his order to sell all the Comtech shares in his Compensation Account between 9:35 a.m. and 10:00 a.m. that morning at prices ranging from $5.21 per share to $4.71 per share.
	84. Peterman’s gross proceeds for the sale of the 8,241 shares in his Compensation Account were $40,712.07—a weighted average price of $4.94 per share.
	85. Peterman’s net proceeds for the sale of 8,241 shares in his Compensation Account were $40,454.54.
	86. The same morning, March 13, 2024, at 10:40 a.m., Peterman’s financial advisor responded to Peterman’s email from the night before at 9:36 p.m.: “I do not have access to sell anything at [the brokerage firm managing the Compensation Account]. You w...
	87. One minute later, at 10:41 a.m., Peterman called his financial advisor.
	88. At 10:44 a.m., Peterman’s financial advisor called the brokerage firm that held Peterman’s Joint Account.
	100. When the market closed on March 13, 2024, Comtech’s stock priced closed at $4.19 per share, a 27.3% drop from the prior trading day’s closing price.
	101. On March 14, 2024, at 9:58 a.m., the brokerage firm representative emailed Comtech: “We received [Peterman’s] request to sell up to 49,400 affiliate control shares under Rule 144. We do understand that Mr. Peterman separated from the company very...
	102. The representative asked in his email: “[1] Is the affiliate pre-cleared with [Comtech] to sell shares under Rule 144?[;]” [2] Is the trading window currently open?[;] [and] [3] When does the window close?”
	103. On March 14, 2024, at 1:04 p.m., Comtech’s general counsel responded to the representative’s email: “Please be advised that our Section 16 officers (of which Ken Peterman was one). [sic] We have an active blackout in place prohibiting trades.”
	104. The next day, Peterman’s brokerage firm issued him a check for $40,454.54, the net proceeds of his sale of Comtech shares in his Compensation Account, and Peterman endorsed and cashed the check on March 25, 2024.
	105. On Monday, March 18, 2024, at 5:20 p.m., after the market closed, Comtech filed its Form 10-Q, reporting the company’s Q2 FY24 results.
	106. The Form 10-Q showed that Comtech had earned revenue of $134.2 million, missing analyst estimates that it would earn $152.9 million in revenue for the quarter.
	107. The Form 10-Q also showed that Comtech’s adjusted EBITDA was $15.1 million, missing analyst estimates that it would be $18.7 million for the quarter.
	108. Comtech’s stock price fell from $4.60 per share when the market closed on March 18, 2024, before the announcement, to $3.43 per share when the market closed on March 19, 2024, the day after the announcement—a stock price drop of 25.4%.
	109. On March 19, 2024, at 11:10 a.m., the brokerage firm representative emailed Comtech’s general counsel, writing: “[Peterman’s] advisor has requested we reach back out to see if the blackout period has been lifted. If so, would you be able to provi...
	110. In response, Comtech’s general counsel wrote: “The blackout period has not been lifted…. The client will be advised when the period is lifted…. The blackout period will not be lifted until the non-public information in the possession of insiders ...
	111. Had Peterman succeeded in selling all 49,400 Comtech shares in his Joint Account between March 13 and March 18, 2024—before Comtech announced its Q2 FY24 earnings on the evening of March 18—he would have avoided losses ranging from approximately ...
	Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
	112. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 111.
	113. Peterman, directly or indirectly, singly or in concert, in connection with the purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange, ...
	114. By reason of the foregoing, Peterman, directly or indirectly, singly or in concert, has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
	PRAYER FOR RELIEF
	Dated: New York, New York
	Tejal D. Shah
	Liora Sukhatme
	Travis Hill
	Mary Kay Dunning
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street
	Suite 20-100
	New York, NY 10004-2616
	212-336-5039 (Dunning)