SEC suing AT&T for telling analysts nonpublic information

Companies that report results that fall short of analyst forecasts can suffer a sell-off in their shares.

AT&T's chief financial officer told the investor relations department to work" the analysts who had estimates for the company's quarterly equipment revenue that were too high, according to the government's complaint.

AT&T investor relations executives Christopher Womack, Michael Black and Kent Evans called Wall Street analysts at about 20 firms privately to tell them about internal smartphone sales data and the impact that would have on its revenue metrics, which the government said is nonpublic, material information told in violation of securities laws.

Analysts subsequently cut their revenue forecasts because of what they were told on the calls before AT&T reported its first-quarter results in April 2016, according to the complaint, and AT&Ts revenue beat the Wall Street consensus for the quarter.

Dallas-based AT&T said in a statement that it did not tell analysts material nonpublic information" and that it will fight the lawsuit. The company said it has made clear that the declining phone sales had no material impact on its earnings."