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The Securities and Exchange Commission is suing AT&T and three of its executives for investor relations because they told Wall Street analysts of the telecommunications giant’s sales data before announcing quarterly results.
The early warning helped AT&T prevent the results from falling below Wall Street’s expectations, according to the SEC’s complaint filed in federal court in Manhattan.
The U.S. financial regulator said on Friday that AT&T was worried in March 2016 that a sharper-than-expected decline in smartphone sales would lead it to estimate Wall Street’s estimates for its first quarter.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| T | AT&T, INC. | 29.63 | +0.71 | + 2.46% |
AT & T SELLS PART OF DIRECT TO BUY FIRM TPG
Companies that report results that do not meet analysts’ forecasts may have a sell-off in their shares.
The chief financial officer of AT&T told the investor relations department to “work” the analysts who, according to the government’s complaint, have estimates for the company’s quarterly equipment revenue.
Christopher Womack, Michael Black and Kent Evans, managers of AT&T investor relations, called Wall Street analysts at about 20 companies privately to tell them about internal sales data for smartphones and the impact it will have on the revenue statement, which according to the government is non-public, ‘substantial’. information told in violation of security laws.
The SEC is suing AT&T and three of its executives for investor relations because they told Wall Street analysts of the telecommunications giant’s sales data before announcing quarterly results. (AP Photo / Mark Lennihan, File)
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Analysts subsequently lowered their revenue forecasts because of what they were told during the calls before AT&T reported its first-quarter results in April 2016, and AT & T’s revenue beat the Wall Street consensus for the quarter.
AT&T, which is based in Dallas, said in a statement that it did not disclose analysts ‘material non-public information’ and that it would fight the case. The company said it “made it clear that the declining telephone sales had no significant impact on its earnings.”