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Shares in Comtech are trading down more than 70% since early Dec. 2023 after the Melville, New York-based telecommunications company has revealed a series of disappointing news, causing the company’s stock to plummet and prompting leading investor rights firm Hagens Berman to open an investigation into possible violations of the U.S. securities laws.

Over the past year, Comtech CEO Ken Peterman repeatedly touted the “One Comtech” strategy implemented under his leadership, which unified the company’s 14 independent, siloed businesses and reportedly spurred Comtech to posting five consecutive quarters of revenue growth.

But cracks in the Company’s façade of success began to emerge on Dec. 7, 2023, when the company disclosed a “going concern” that its cash flow will be enough to fund operations over the next 12 months and repay a credit facility due in Oct. 2024. This news sent the price of Comtech shares crashing $3.71, or 29% lower on Dec. 8, 2023.

Then, on Mar. 13, 2024, Comtech announced that its board of directors fired Peterman for cause. Though the company claimed the firing was unrelated to the company’s business strategy or financial results, Comtech provided some color for the reason for Peterman’s ouster by stating, “The Board is committed to upholding the highest standards of ethical and professional conduct.”

The company also announced that it would not timely file its quarterly financial statements with the SEC. This news sent the price of Comtech shares down $1.57, or 27% lower that day.

Then, on Mar. 18, 2024, under the interim CEO, Comtech reported dismal Q2 2024 financial results. For the quarter, Comtech posted revenue of only 134.2 million, which badly missed consensus estimates and represented a 12% decrease over the prior quarter.

In downgrading Comtech, analysts at Jeffries expressed concern about the company’s burgeoning unbilled receivables (i.e., revenue the company had recognized before invoicing the end customer).

This news sent the price of Comtech shares down as much as $1.49, or 32% lower during intraday trading on Mar. 19, 2024.


What is the CMTL investigation about?

The investigation centers on whether Comtech’s firing of CEO Ken Peterman was truly unrelated to the Company’s business strategy, financial results and prior financial statements.


I worked at CMTL. What should I do?

If you were an employee of CMTL, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.


What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.


Am I affected? What do I need to do to participate?

If you were an investor in CMTL, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any CMTL investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.

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