Finance

AT&T to pay $6.25M to SEC over alleged leaks to Wall Street analysts

AP Andrew Harnik
This Aug. 5, 2017, file photo shows the U.S. Securities and Exchange Commission building in Washington.

AT&T has agreed to pay $6.25 million to the Securities and Exchange Commission (SEC) over the company’s alleged leaks to Wall Street analysts, according to a settlement agreement filed on Friday.

The three AT&T executives accused of involvement in the leaks — Christopher Womack, Kent Evans and Michael Black — will each pay a $25,000 penalty to the SEC without “admitting or denying” the allegations.

The SEC filed a complaint against the telecommunications giant and the three executives in March 2021, accusing them of violating the commission’s fair disclosure rule. The rule prohibits companies from making selective disclosures of “material nonpublic information” to analysts and others.

In the spring of 2016, the SEC alleges Womack, Evans and Black spoke privately with analysts and disclosed such information in an effort to get them to reduce their estimates of the company’s revenue for the first quarter of 2016.

The effort came after AT&T learned that a larger-than-expected dip in smartphone sales would cause the company’s revenue to come in below analyst estimates, according to the SEC.

“The goal was to induce enough analysts to lower their estimates so that the consensus revenue estimate would fall to the level that AT&T expected to report to the public—i.e., AT&T would not have a revenue miss,” the complaint alleged. 

AT&T said in a statement to The Hill that it is pleased to have reached the settlement.

“We are committed to following all applicable laws and pleased to have resolution with the SEC,” the company said. “With this settlement, the company and its employees neither admitted nor denied the SEC’s allegations.”

Updated at 11:36 a.m.

Tags AT&T fair disclosure SEC Securities and Exchange Commission Settlement Wall Street

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