AT&T Pays Record Amount To Settle SEC Charges

The Securities and Exchange Commission (SEC) on Monday announced that AT&T (NYSE: T) has settled charges for alleged violations of Regulation FD. The company has agreed to pay US$6.25 million, and three company executives have agreed to pay $25,000 each.

The settlement is the largest amount ever in a Regulation FD case, according to the SEC.

The charges were brought in March 2021 for an incident that dates back all the way to March 2016. According to the complaint, AT&T learned that the company’s revenue would fall below analysts’ estimates due to a decline in smartphone sales. And as this was about to happen for the third consecutive quarter, the company launched a “campaign” to avert the situation and beat the consensus revenue estimate. 

AT&T investor relations executives Christopher Womack, Michael Black, and Kent Evans were asked to make one-on-one calls with analysts to “walk” down their estimates, selectively disclosing the company’s “projected or actual total revenue, and internal metrics bearing on total revenue, including wireless equipment revenue and wireless equipment upgrade rates.” 

The campaign resulted in AT&T beating the overall consensus revenue estimate when it reported results to the public on April 26, 2016. 

“The actions allegedly taken by AT&T executives to avoid falling short of analysts’ projections are precisely the type of conduct Regulation FD was designed to prevent,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

“Compliance with Regulation FD ensures that issuers publicly disclose material information to the entire market and not just to select analysts.”

The case was denied summary judgment by the federal district court in September and was headed for trial before this settlement was agreed upon. In its statement, the SEC says that the defendants did not admit or deny allegations made in the complaint.

AT&T last traded at US$19.30 on the NYSE.


Information for this briefing was found via the US Securities and Exchange Commission, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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