A CEO’s Road To Hell

It began with forbidden love and ended in felony charges for Comtech’s Ken Peterman

“Thus with a kiss I die.” ― William Shakespeare

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Another CEO has sealed his fate with a kiss.

Comtech, which provides a host of high-tech communications services, did not communicate the reasons why it dumped its CEO when it announced his termination in March.

Now we know. Comtech’s Ken Peterman, 67, had a sexual relationship with a subordinate and didn’t disclose it as required by the company.

We know this because last week federal prosecutors filed insider trading and securities fraud charges against Peterman and arrested him in San Diego. The Securities and Exchange Commission has also filed civil charges.

The indictment alleges that after Peterman learned of the lousy financial performance his company was about to release, compounded with the news of his firing, he began dumping stocks ahead of public announcements.

So much lost for so little

A kiss, a coverup, a firing, felony charges, and possibly a long prison sentence to come. What a slide down the jagged corporate ladder into the fiery abyss. Neither Comtech nor Peterman have commented on the complaints.

This is a guy who made more than $4.5 million in fiscal 2024. But the SEC alleges that he avoided only about $12,445 in losses by trading before the company’s March 18 earnings announcement.

He also told his financial advisor to sell additional shares, but a trading blackout prevented the sale, the SEC complaint says. That unsuccessful scramble would have avoided about $110,000 in losses.

With numbers this small, Peterman’s case seems like a pretty aggressive prosecution given what so many other corporate ne’re-do-wells have gotten away with, but …

A CEO who has an affair with an underling cheats on his company, his shareholders and often his spouse in a single folly.

Aren’t CEOs paid enough to find lovin’ somewhere else? (Illustration credit: AI Generated)

A man of integrity?

Comtech has long been a losing bet with a stock that has lost about 94% of its value since its 2007 peak. It provides 911 emergency services, satellite technologies and cloud capabilities for commercial and government customers. The company was based in Melville, N.Y., but relocated its headquarters to Chandler, Ariz., in March.

Before this series of blunders, its CEO was a well-respected aerospace and defense executive. You’ve gotta love this brown-nosing piece in CIO Views – which Comtech touted in its annual report.

“Unique and visionary leadership through integrity, passion, and innovation are the qualities that define Ken Peterman. …

“Ken’s passionate, inclusive, and engaging leadership style is guided by empathy, listening, and stewardship. In addition, his high ethical standards prioritize honesty and integrity as the most important personal and organizational priorities.”

It’s the C-Suite, not the See-Sweet

CEOs getting fired for affairs make occasional headlines. Usually, if they’re crafty enough to land in the C-Suite, they likely don’t get caught. And when they do, the company keeps a lid on it.

Still, sometimes the lid gets blow right off, especially when the company is performing badly or is under fire from shareholder activists.

In September, Business Blunders covered the firing of Norfolk Southern CEO Alan Shaw, who was caught in a tryst with the railroad’s Chief Legal Officer Nabanita Nag. It wasn’t the toxic train derailment in East Palestine, Ohio, that did him in. Or the activist investors demanding his resignation. It was forbidden love.

Oh, the folly. Some guys just couldn’t score a prom date in high school, but once they get that CEO cred …

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