U. S. rare Securities and Exchange Commission lawsuit accusing AT&T Inc. of selectively disclosing financial information to Wall Street analysts was denied dismissal on Thursday by a judge. In a 129-page ruling, the U. A “formidable” amount of evidence, according to S. District Judge Paul Engelmayer in Manhattan, shows that AT&T and three investor relations officials misled analysts in March and April 2016 about how lower-than-expected smartphone sales would affect total income.
According to the SEC, this was a violation of Regulation FD, or fair disclosure, which it implemented in 2000 to prevent corporations from revealing important nonpublic information to individuals privately without reporting it publicly, thereby leveling the playing field for investors. The Dallas-based AT&T was charged by the SEC in March 2021 with disclosing information about its smartphone business to 20 companies.
Court documents state that the chosen analysts “uniformly” reduced their revenue forecasts by an average of $1 billion, which was just enough for AT&T to surpass the revised consensus estimate. Additionally, Engelmayer denied AT&T’s argument that Regulation FD was unlawful in and of itself since it restricted the company’s freedom of expression.
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