Tags: Financial Markets | directv | at&t | randall stephenson | lawsuit | fraud | stock price

AT&T Sued Over Fraud With DirecTV Now Sales

Randall Stephenson gestures during a televised interview
AT&T Chairman & CEO Randall Stephenson (Richard Drew/AP)

By    |   Tuesday, 17 September 2019 05:55 PM

AT&T has been hit with a class-action lawsuit alleging it pumped up the subscriber count for its DirecTV Now streaming service, artificially increasing the company's share price.

The suit was filed in the Southern District of New York on behalf of various individuals and union pension fund stockholders.

The suit comes as AT&T's DirecTV has been rocked by more than a million customers quitting the service in the past year.

AT&T says it expects another 1.1 million subscribers to drop DirecTV and other TV services in Q3 of this year as customers leave for less expensive options.

The subscriber losses come on the heels of recent calls by President Donald Trump for his supporters to boycott AT&T products, including DirecTV, noting the company's ownership of CNN.

Plaintiffs in the lawsuit claim AT&T CEO Randall Stephenson and company executives used fraudulent means to up subscriber count for their service, now known as DirecTV Now, to show increasing accounts while masking "serious technical problems due to premature roll-count," according to Multichannel News.

The suit, citing 17 former AT&T employees, claimed AT&T and "executive defendants," including CEO Randall Stephenson, "falsely depicted DirecTV Now as a fast-growing product with increasing subscribers and strong margins that would offset declining subscriber levels in AT&T's other video products, including its mature satellite DirecTV product."

The suit alleges AT&T salespeople were directed to bundle multiple accounts in a single activation, according to Multichannel.

They are also accused of creating phony email addresses and running credit cards multiple times to create false accounts.

The law firms behind the suit said they found the fake account practice was "massive and nationwide."

Bloomberg reported the suit said the numbers were boosted ahead of AT&T's 2018 merger with Time Warner Inc.

The suit said AT&T should be found guilty of violating securities laws.

An AT&T spokesperson said: "We plan to fight these baseless claims in court."

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AT&T has been hit with a class-action lawsuit alleging it pumped up the subscriber count for its DirecTV Now streaming service, artificially increasing the company's share price.
directv, at&t, randall stephenson, lawsuit, fraud, stock price
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2019-55-17
Tuesday, 17 September 2019 05:55 PM
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