US securities regulators have hired AT&T and three members of its investor relations team to selectively disclose information to analysts covering the US telecoms firm to avoid falling short of Wall Street forecasts.
The three executives made private one-to-one calls to analysts from about 20 different research groups, the Securities and Exchange Commission said Friday, after discovering in March 2016 that declining smartphone sales would leave AT&T revenue. more than $ 1 billion below consensus estimates for the quarter.
AT & T’s chief financial officer instructed its investor relations department to “work with analysts who still have too much equipment revenue,” the SEC complaint said.
As a result, the SEC said, analysts cut their forecasts, lowering Wall Street’s consensus revenue estimate to just below the level reported by AT&T.
AT&T denied the allegations, challenging the regulator’s claim that it shared material non-public information and warning that the allegations would “only cool productive communications between companies and analysts.”
“Significantly, after spending four years investigating the matter, the SEC does not cite a single witness involved in any of these analyst calls who believe material non-public information was passed on to them,” the company said in a statement.
Investors often punish the shares of companies whose financial results lack estimates …