SEC and DOJ Charge Former Comtech CEO with Insider Trading

SEC Charges Ken Peterman, Former Comtech CEO, with Insider Trading in Advance of Negative Earnings Announcement

The Securities and Exchange Commission today announced insider trading charges against Ken Peterman, the former CEO, president, and Chair of the Board of Comtech Telecommunications Corp., in connection with his sale of Comtech shares on the basis of material non-public information about Comtech’s forthcoming negative quarterly earnings results.

According to the SEC complaint, Peterman allegedly received a confidential presentation detailing Comtech’s forthcoming negative quarterly earnings results on March 4, 2024. He was allegedly informed that he was being terminated for cause eight days later, on March 12, 2024. The SEC’s complaint alleges that a few hours after he was terminated, and while subject to two different trading blackouts, Peterman placed an order to sell Comtech stock. On March 18, 2024, Comtech reported its negative quarterly earnings, which caused its stock price to drop more than 25 percent. The complaint alleges that Peterman avoided losses of about $12,445 by trading in advance of Comtech’s negative earnings announcement. Peterman allegedly directed his financial advisor to sell additional Comtech stock he held in a joint account, but the financial advisor was unable to complete the sale because of a trading blackout. Had the sale been completed, Peterman allegedly would have avoided additional losses of about $110,000. Source:

Chance of All-Republican SEC Rises With Delay in Caroline Crenshaw Nomination

Democrat Caroline Crenshaw’s nomination to serve another term as a commissioner at the Securities and Exchange Commission just hit more obstacles after a planned committee vote was postponed.

With few days remaining on the congressional calendar this year to reschedule, the move heightens the possibility of a three-person, all Republican SEC in the early months of the next Trump administration. Crenshaw’s renomination has been in limbo since her term at the agency officially ended in June.

Senate Banking Committee Chair Sherrod Brown initially postponed the vote just minutes before it was scheduled Wednesday morning and after the panel’s GOP members had appeared. Republican senators then blocked Brown’s request to waive procedural rules and hold a vote later that day, a Senate aide said.

US appeals court tosses Nasdaq board diversity rules

A US appeals court on Wednesday ruled that Nasdaq could not impose rules requiring companies listed on the exchange to have women and minority directors on their boards or explain why they do not.

The New Orleans-based 5th US Circuit Court of Appeals on a 9-8 vote sided with two conservative advocacy groups in finding that the rules approved by the US Securities and Exchange Commission ran afoul of federal securities law.

Those rules were challenged by the National Center for Public Policy Research, a conservative think tank, and Alliance for Fair Board Recruitment, a group founded by affirmative action opponent Edward Blum.

‘Choose Your Own Adventure’ Pay Gives Steptoe Edge in Comp Wars

The firm’s associates can now choose their own billable hour targets and corresponding compensation. The policy will take effect in the new year. Those selecting the highest target—2,200 billable hours per year—can earn up to nearly $582,000 on a seniority-based scale exceeding that in place at top Big Law firms.

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Steptoe associates beginning next year will be placed in one of three pay categories based on the volume of hours they are expected to bill, Cappaert said. They have the option to move to a lower billable hour target and corresponding pay for 2025 and can opt for a different category each year.

Top-billers—those targeting 2,200 hours—will be paid on a scale ranging from $236,250 to $581,750. The scale for those billing 2,000 hours per year will go from $225,000 to $502,500. The third category of associates—those targeting 1,800 billable hours—will be paid on a scale that starts at $215,000 for first-year associates, but the firm declined to specify the top end of the range.

FBI Director Christopher Wray to Step Down Before Trump Takes Office

FBI Director Christopher Wray is stepping down before the end of his 10-year term, after President-elect Donald Trump made clear he would fire him in favor of a loyalist intent on overhauling the bureau.

Wray told employees Wednesday he would resign before the new Trump administration begins.

“In my view, this is the best way to avoid dragging the Bureau deeper into the fray, while reinforcing the values and principles that are so important to how we do our work,” Wray said during an internal town hall at the FBI’s headquarters.

Supreme Court Dismisses Nvidia Case, 2nd Securities Suit Dropped This Term

At the outset of the current U.S. Supreme Court term, corporate and securities law observers and commentators were excited that the Court had agreed to take up two securities law cases that had significant potential to provide insights about securities lawsuit pleading standards and processes. However, as noted here, in November, the court dismissed the Facebook Cambridge Analytica case, one of the two cases the Court was to take up this term. Now, in a terse, one-line December 11, 2024, order, the Court dismissed the Nvidia case, the second of the two cases it had agreed to take up, meaning that instead of addressing two securities law cases this term, it will now not consider any securities cases. A copy of the Court’s December 11, 2024, order can be found here.