Case: SEC v AT&T Inc et al, U.S. District Court, Southern District of New York, No. 21-01951.
AT&T has been accused of leaking customer financial information to Wall Street analysts to warn them of overall revenue cuts, therefore preventing disappointment from investors. A federal judge denied AT&T’s motion to dismiss on the grounds that there was “formidable” evidence against AT&T and its investors. Nonetheless, the court also conceded that reasonable jurors could conclude the violation lacked bad faith; that the investor executives did not intend to defraud their investors.
AT&T’s alleged goal was to “manage” those analysts and have them lower their revenue forecasts, so that actual results would meet the reduced forecasts and not disappoint investors who might otherwise drive its share price down.
Source: U.S. judge rejects AT&T bid to dismiss SEC lawsuit over leaks to analysts | Reuters