On March 5, the SEC announced that it had charged AT&T and three of its investor relations executives with repeated violations of Regulation FD by selectively disclosing material nonpublic information to research analysts. The SEC’s complaint alleges that the executives “made private, one-on-one phone calls to analysts at approximately 20…firms… [and] disclosed internal smartphone sales data… generally considered ‘material’ to…investors.”
According to The Wall Street Journal, “AT&T called the allegations meritless and issued a statement vowing to challenge the charges.”
The SEC’s track record in enforcement actions involving Reg FD has been mixed, and some commentators have believe that the agency has been overzealous in prosecuting cases that were marginal. However, this action reminds issuers that Reg FD is alive and well and that the SEC Enforcement Division continues to monitor corporate conduct and to pursue those it believes have violated the rule.
Please direct any questions or observations to Gunster securities law and corporate governance practice leader Bob Lamm.
