AT&T charged with violating SEC regulations

Business

EAST SETAUKET, NEW YORK – MARCH 16: An image of the sign for AT&T as photographed on March 16, 2020 in East Setauket, New York. (Photo by Bruce Bennett/Getty Images)

WASHINGTON (NewsNation Now) — The Securities and Exchange Commission announced they were charging AT&T Inc., along with three of its executives, with selectively disclosing material nonpublic information to research analysts.

The complaint dates back to a 2016 incident where AT&T attempted to cover up smartphone sale losses that would cause revenue to fall short of analysts’ estimates for the third consecutive quarter.

The SEC complaint alleges that AT&T Investor Relations executives Christopher Womack, Michael Black, and Kent Evans made private calls with 20 separate firms and released AT&T’s internal smartphone sales data and the impact of that data on internal revenue metrics.

These calls allegedly caused analysts to substantially reduced their revenue forecasts. When AT&T reported their revenue on April 26, 2016, the overall consensus estimate was just below what AT&T actually reported.

The documents AT&T executives allegedly used to persuade analysts were the type of information generally considered nonpublic information reserved for AT&T investors and prohibited from selective disclosure under Regulation FD. 

At the time of the incident in early March 2016, AT&T reportedly expected their consolidated gross revenue to be more than a $1 billion below the consensus estimates.

The SEC is seeking monetary damages from AT&T and the three executives named in the complaint.

Read the full SEC complaint below

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