SEC Alleges AT&T, 3 Employees Tipped Off Wall Street

WASHINGTON—Three employees of AT&T Inc. selectively shared information about smartphone sales in 2016 to analysts who then lowered their revenue forecasts, allowing the telecom company to beat earnings estimates, securities regulators alleged Friday.

The Securities and Exchange Commission said the discussions of material information violated a rule known as Regulation FD, which requires public companies to reveal market-moving information to everyone at once. The SEC sued AT&T and the three investor-relations executives in Manhattan federal court.

AT&T called the allegations meritless and issued a statement vowing to challenge the charges.

“The SEC’s pursuit of this matter will not protect investors and instead will only serve to chill productive communications between companies and analysts, something the SEC was worried about when it adopted Regulation FD some 20 years ago,” the company wrote. “Unfortunately, this case will only create a climate of uncertainty among public companies and the analysts who cover them.”

In 2016, The Wall Street Journal reported that AT&T investor-relations employees called analysts before the company reported quarterly results that April and encouraged analysts to look back at comments about smartphone upgrades made by the company’s finance chief in early March.


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