AT&T failed in an attempt to dismiss a Securities and Exchange Commission (SEC) lawsuit which alleges the operator selectively leaked information to financial analysts.
A district judge in New York City stated the court had found evidence three investor relations executives had warned analysts in March and April 2016 that lower-than-excepted smartphone sales would have an impact to revenue.
The SEC launched its case against AT&T in March 2021, accusing the operator’s executives of breaking reporting rules during calls with around 20 separate analyst companies in 2016.
It claims internal smartphone sales data illustrating a steeper-than-expected decline was revealed during the calls, which led to analysts reducing revenue estimates for the operator.
AT&T’s main goal, the SEC asserts, was to manage analyst expectations and have them lower revenue forecasts, so actual results would not disappoint investors and adversely affect its share price.
The operator strenuously denied the claims at the time, arguing there was no disclosure of material non-public information and no violation.
Since then, AT&T has tried to get the case dismissed.
However, it has not been successful. Notably, the court did not award victory to the SEC and the case is now expected to proceed to trial, unless a settlement is reached.