Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
⏰ Save Valuable Time with Faster Stock Data & Tools Go Pro Now
U.S. judge rejects AT&T bid to dismiss SEC lawsuit over leaks to analysts
© Reuters. FILE PHOTO: The AT&T logo is seen in a store window, as airports around the country are awaiting for Verizon and AT&T to rollout their 5G technology, in the Manhattan borough of New York City, New York, U.S., January 19, 2022. REUTERS/Brendan McDermid
By Jonathan Stempel
NEW YORK (Reuters) -A U.S. judge on Thursday rejected AT&T Inc (NYSE:T)'s bid to dismiss an unusual Securities and Exchange Commission lawsuit accusing the phone company of selectively leaking financial information to Wall Street analysts.
In a 129-page decision, U.S. District Judge Paul Engelmayer in Manhattan said he found "formidable" evidence that AT&T and three investor relations executives improperly warned analysts in March and April 2016 that lower-than-expected smartphone sales would cut into overall revenue.
The SEC said this violated Regulation FD, or fair disclosure, which it adopted in 2000 to bar companies from disclosing material nonpublic information privately but not to the public, helping level the playing field for investors.
But the judge stopped short of declaring victory for the SEC, saying reasonable jurors could conclude that the executives Christopher Womack, Kent Evans and Michael Black did not intend to defraud investors.
"This case will now proceed toward trial, barring settlement," Engelmayer wrote.
AT&T and the SEC did not immediately respond to requests for comment.
In its March 2021 lawsuit, the SEC accused Dallas-based AT&T of leaking details about its smartphone business to 20 firms.
AT&T's alleged goal was to "manage" those analysts and have them lower their revenue forecasts, so that actual results would meet the reduced forecasts and not disappoint investors who might otherwise drive its share price down.According to court papers, the selected analysts "uniformly" cut their revenue estimates by an average $1 billion, just enough for AT&T to beat the lowered consensus forecast.
Engelmayer also rejected AT&T's claim that Regulation FD itself was unconstitutional because it infringed the company's free speech.
The case is SEC v AT&T Inc et al, U.S. District Court, Southern District of New York, No. 21-01951.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.