On June 24, 2019, Iron Workers Locals 40, 361 & 417 Union Security Funds, Iron Workers Local 580 Joint Funds, and Local 295 IBT Employer Group Pension Fund (collectively, the “Institutional Investor Group”) were appointed lead plaintiffs in a securities class action against AT&T Inc. (“AT&T”) . Significantly, despite the fact that courts generally appoint as lead plaintiff the investor alleging the largest loss, Pomerantz was able to secure the Institutional Investor Group’s appointment even though the group had losses that were significantly less than those suffered by two competing movants: (1) KBC Asset Management NV (“KBC”), a Belgian asset manager claiming that certain of its funds had incurred aggregate losses of $2.8 million; and (2) Pro-Alpha Investments Limited (“Pro-Alpha”), an opaque Cypriot holding company alleging a loss of $1.78 million.
The complaint against AT&T alleges, in relevant part, that the company and its top officers defrauded investors primarily by touting yearly and quarterly growth trends in AT&T’s Entertainment Group segment, particularly Video Entertainment, including quarterly subscriber gains in its DirecTV Now Service sufficient to offset any decrease in traditional satellite DirecTV subscribers. On October 24, 2018, the truth finally emerged, when AT&T revealed a dramatic reversal of its reported total subscriber “Net Additions” trends, disclosing traditional DirecTV satellite subscriber losses that jumped over 25% from 286,000 to 359,000 quarterly, and DirecTV Now subscriber losses that plummeted over 85% from 342,000 to 359,000 quarterly. On this news, AT&T’s stock price fell nearly 12%.