The Commission also alleged the three executives ignored AT&T’s internal documents that specifically informed Investor Relations personnel that its smartphone sale and revenue are considered “material” to investors. Therefore, they are prohibited from selective disclosure under Regulation FD.
Additionally, the SEC alleged that the executives’ action prompted analysts to significantly lower their revenue estimates. As a result, the overall consensus revenue estimate declined to just below the number AT&T eventually reported to the public on April 26, 2016.
Woman, Evans, and Black allegedly “recklessly disregarded” Regulation FD
During their calls to the select analysts, “Womack, Evans, and Black intentionally disclosed material nonpublic information regarding AT&T’s results to the date,” the Commission alleged in the complaint.
In some of his calls to analysts, Black told them that he was conveying publicly available consensus estimates. In reality, he was disclosing AT&T’s own internal forecasts or actual results, the SEC further alleged.
