Lawsuits: Comtech Telecommunications used ex-CEO's affair as pretext for firing after he questioned financial records

The former CEO of a public company once based in Melville is alleging his affair with an employee was used as a pretext to fire him last year after he questioned the accuracy of financial reports.

Ken A. Peterman, 68, of Encinitas, California, was fired by Comtech Telecommunications Corp. as its CEO, president and board chairman after nearly two years, according to a March 13, 2024, company announcement. Comtech still maintains an office in Melville but moved its headquarters to Arizona last year.

In two lawsuits filed in federal court in Manhattan and a regulatory complaint, Peterman alleges he angered the Comtech board by questioning the accuracy of revenue and pre-tax profit figures in earnings reports, potential conflicts of interest involving board members and other corporate governance issues.

Peterman, who calls himself a whistleblower in the court filings, said Comtech board director Lawrence J. Waldman, a well-known Long Island accountant, “orchestrated [the firing] in retaliation for Peterman’s whistleblowing.” Waldman allegedly used a “sham complaint” from Peterman’s former lover to have him terminated four days after the complaint came to light, state the filings.

A Comtech spokesperson said on Tuesday that it “does not comment on pending litigation." An attorney for the company and its board directors, including Waldman, didn’t respond to a request for comment. Waldman, who also is board chairman for the Long Island Association business group, didn’t respond to a request for comment.

Peterman’s attorney, Daniel J. Kaiser, told Newsday his client’s concerns about Comtech’s accounting and corporate governance were valid because the company has since filed corrected reports with the U.S. Securities and Exchange Commission, which regulates public companies.

Kaiser also said the complaint filed by Ashley Clark, 44, with whom Peterman had the affair, “contained factual inconsistencies, and it lacked merit.”

Clark, of Baiting Hollow, was Comtech’s chief of staff during the affair. Through her attorney, she declined to comment on Tuesday. Clark has asked a federal judge to dismiss the defamation suit brought against her by Peterman in February.

In court filings, Peterman said he was wrongfully terminated for having the affair, which he said lasted less than six months in 2023. Peterman alleges he told Comtech board members he had “an open marriage” and received their approval to carry on the affair.

Clark, in filings, called the affair “clandestine” and accused Peterman of forcing her to do things in the relationship against her will.

Peterman also alleges in the filings that Comtech excluded him from negotiations that led to a settlement with Clark but left him exposed to potential liability for her “heinous and fabricated claims of sex crimes, sexual harassment and sex trafficking."

Clark also filed her complaint to the U.S. Equal Employment Opportunity Commission, the filings show.

Separately, Peterman has been accused by the Department of Justice and SEC of insider trading on the night he was fired.

Peterman allegedly tried to sell his Comtech shares ahead of a negative earnings report and news of his firing. The shares were sold the next day, and he received $40,455. The transactions took place after the company announced Peterman had been let go but before the earnings report, which caused the stock price to fall. By selling when he did, Peterman avoided a loss of $12,445, according to the SEC suit.

Kaiser, Peterman’s attorney, expressed confidence on Tuesday that his client would prevail.

“Evidence has been uncovered that shows Comtech knowingly incorrectly configured Peterman’s stock account and failed to reverse a request [by Peterman] to reverse the stock trade,” the lawyer said.

Peterman was paid about $9.5 million during the 19 months he served as CEO. His compensation package included $1.25 million in salary and $7.3 million in stock awards, according to securities filings.

Comtech makes satellite base stations and next-generation 911 systems for municipalities and the military.

Before moving its headquarters to Chandler, Arizona, the company employed 118 people at an office and factory on Baylis Road, according to state records for 2023. The company has since sold its power systems technology business, which includes the factory, to Stellant Systems Inc. for $32.5 million.

Comtech now employs about 40 people on Long Island. The company has lost money for five of the last six years and faces questions about whether it can continue to operate because of a cash crunch, according to securities filings.