Court Rebuffs AT&T Bid to Dismiss SEC Lawsuit

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AT&T tried to get a Securities and Exchange Commission (SEC) lawsuit dismissed, but failed. The suit alleges AT&T leaked financial information to certain analysts.

A district judge in New York City stated the court found evidence that three investor relations executives warned analysts in March and April 2016, that lower-than-expected smartphone sales would have an impact on revenue, according to Mobile World Live. The District Court did not award victory to the SEC and the case is now expected to proceed to trial, unless a settlement is reached.  

The SEC began its case against AT&T in March 2021. It accused the carrier’s executives of breaking reporting rules during calls with about 20 separate analyst companies in 2016. It claims internal smartphone sales data showing a sharper-than-expected decline was revealed during the calls, which led to analysts reducing revenue estimates for AT&T.

The SEC asserts that AT&T’s main goal was to manage analyst expectations and persuade them to lower revenue forecasts, so actual results would not disappoint investors and adversely affect its share price.

AT&T denied the claims. It said there was no disclosure of non-public information and no violation. Since then, AT&T has tried to get the case dismissed, noted Mobile World Live.

By Leslie Stimson, Inside Towers Washington Bureau Chief

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