The Securities and Exchange Commission (SEC) had accused AT&T executives of leaking financial data to analysts
This week, AT&T has reportedly agreed to pay the SEC $6.3 million to settle a lawsuit relating to the misconduct of three of its executives.
The case, initiated back in March 2021, saw the SEC accuse AT&T executives Christopher Womack, Kent Evans, and Michael Black of selectively leaking private information to a number of analysts ahead of its earnings announcement in April 2016.
The SEC holds that these individuals made phone calls to around 20 analyst firms, revealing information that prompted the analysts to reduce revenue estimates for the operator for Q1 2016.
As a result, AT&T subsequently beat the analysts’ consensus forecast when its financial results were announced in April; the SEC argues the move effectively shielded the company’s share price from dropping too sharply.
In the US, companies are barred from disclosing non-public information privately. This forms the keystone of the SEC’s argument.
AT&T had attempted to have the lawsuit dismissed earlier in the year, but saw their appeals rejected in September.
Now, the company has agreed to settle, saying it “neither admitted nor denied liability”.
According to the filing, Womack, Evans, and Black have each also agreed to pay an individual fine of $25,000 without admitting or denying wrongdoing.
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