On March 5, 2021, the U.S. Securities and Exchange Commission announced it charged AT&T, Inc. and three of its investor relations executives with selectively disclosing material nonpublic information to research analysts in violation of Regulation FD. The SEC’s complaint alleges that to avoid falling short of the consensus revenue estimates for the third consecutive quarter, AT&T investor relations executives made private, one-on-one phone calls to analysts at several firms. According to the complaint, on these calls, the executives disclosed internal smartphone sales data and the impact of that data on internal revenue metrics. The complaint alleges that internal company documents provided that revenue and sales of smartphones were types of information generally considered “material” to investors, and therefore prohibited from selective disclosure under Regulation FD. The complaint further alleges that as a result of what they were told on these calls, the analysts substantially reduced their revenue forecasts, leading to the overall consensus revenue estimate falling to just below the level that AT&T publicly reported on April 26, 2016.
At this point, the SEC’s allegations are unproven and it is unclear whether this claim will be settled and what type of penalties (if any) AT&T will face. The charges reinforce the SEC’s commitment to ensuring issuers disclose material information to the investing public and not selectively to analysts.
KMK Law articles and blog posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. The laws/regulations and interpretations thereof are evolving and subject to change. Although we will attempt to update articles/blog posts for material changes, the article/post may not reflect changes in laws/regulations or guidance issued after the date the article/post was published. Please consult with counsel of your choice regarding any specific questions you may have.
ADVERTISING MATERIAL.
© 2022 Keating Muething & Klekamp PLL. All Rights Reserved
- Partner
Jim Kennedy practices in the Business Representation & Transactions Group. The focus of his practice is corporate, securities, and financing law, where he has extensive experience in mergers, acquisitions and ...
- Partner
Mark Reuter advocates for business clients in transactions, proceedings and conflicts regulated by federal and state securities laws and stock exchange rules. A partner in the firm’s Business Representation & Transaction ...
- Partner
As a partner in the firm’s Business Representation & Transactions Group, Allie Westfall’s insight and proven analytical skills help translate the complexities of the often-challenging securities laws. Allie’s counsel ...
- Associate
Michael Goldman practices in the firm's Business Representation & Transactions Group, where he counsels individuals and businesses on broad range of general corporate, financial, and securities transactions.
Michael earned ...
Topics/Tags
Select- Securities Law
- SEC
- Securities Regulation
- Cybersecurity and Privacy Law
- Mergers & Acquisitions
- Coronavirus
- Economic Sanctions
- Ohio LLC Act
- Cybersecurity Regulation
- Nasdaq
- Corporate Law
- Tax Planning
- Corporate Tax
- Paycheck Protection Program
- Dodd-Frank
- IRS
- JOBS Act
- FAST Act
- Proxy Access Rules
- Securities Litigation
- Consumer Protection Act
- Corporate Governance
- SEC Enforcement
- Crowdfunding
- Cryptocurrency
- Taxation
- Hedging
- Private Offerings
- Real Estate Law
- Conflict Minerals
- Emerging Growth Companies
- Investors
- Pay Ratio Disclosure
- Intellectual Property
- Technology
- Whistleblower
- Opportunity Zone
- LIBOR
- Accredited Investors
- Sales Tax
- United States Supreme Court
- Online Trading Platforms
- IPO
- Registration Statement
- Executive Compensation
- Health Care Act
- Annual Reports
- Ohio Foreclosure Reform
- Family-Controlled Entities
- Gift and Estate Transfers
- Director Compensation
- Wall Street Reform
- Board of Directors
- Director Independence
- Clawback Rules
- Cyber Insurance
- Data Breach
- Total Shareholder Return
- Lenders
- Receivership Statute
- Regulation A
- Regulation D
- Compensation Committee Certification
- Government Shutdown
- CDEs
- CDFI Fund
- Community Development Entities
- Community Development Financial Institutions Fund
- New Markets Tax Credit
- NMTC
- NMTC Financing
- Regulation Fair Disclosure
- Social Media
- Benefits
- Healthcare Reform
- Litigation
- Marketing
- Public Company Transition Rules
- Employment Incentives
- HIRE Act
- Social Security Tax
- Tax Credit
Recent Posts
- SEC Provides Sample Guidance on Disclosure of Russia-Ukraine Invasion
- Proposed SEC Climate-Related Disclosure Requirements
- Proposed SEC Cybersecurity Rules
- International Unrest and its Impact on M&A
- The United States Ramps Up Severe Economic Sanctions on Russia and Export Controls
- Revised Ohio LLC Statute
- Beware of ‘Spring-Loaded’ Awards: SEC Issues Updated Accounting Guidance
- SEC Opens Floodgates for ESG Proposals
- NYSE Proposes an Amendment to the Shareholder Voting Requirement
- SEC Charges Pearson plc for Misleading Investors About Cyber Breach and Inadequate Disclosure Controls