AT&T Coverup of Cables' ‘Toxic Lead’ Plunged Stock Price, Alleges Securities Fraud Suit
AT&T’s March 2020 update to its environmental policy attesting to its commitment to employee safety contained “materially false and misleading statements” because the company “owned cables covered in toxic lead” that caused harm to “everyday people,” employees and the environment, alleged shareholder John Brazinsky in a securities fraud class action Friday (docket 2:23-cv-04064) in U.S. District Court for New Jersey in Newark.
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The class action references a recent series of Wall Street Journal articles containing assertions that inoperative lead-clad telecom cables at the bottom of Lake Tahoe are a significant public health concern (see 2307200027). AT&T said it “strongly disagrees” with the reporting, but the WSJ coverage caused AT&T shares to drop by as much as 7% due to the defendants’ “wrongful acts and omissions,” inflicting “significant losses and damages” on Brazinsky and members of his potential class, said the complaint.
The complaint seeks to recover “compensable damages” caused by AT&T’s violations of federal securities laws on behalf of investors who bought AT&T stock between March 1, 2020, and July 26. The named defendants include AT&T itself, plus its current and former CEOs, John Stankey and Randall Stephenson, and its current and former chief financial officers, Pascal Desroches and John Stephens.
AT&T’s 2020, 2021 and 2022 annual reports contained statements on employee safety that were “materially false and misleading,” said the complaint. At the time the statements were made, AT&T “was failing to provide employees with proper safety training or equipment to protect them from the toxic lead present on company-owned cables,” it said. It also failed to “adequately warn them of the presence of the toxic lead,” it said.
The members of Brazinsky’s proposed class “are so numerous that joinder of all members is impracticable,” said the complaint. Though the exact number of class members is unknown and can be ascertained only through “appropriate discovery,” Brazinksy believes they number in the “hundreds, if not thousands,” it said. Brazinsky “will fairly and adequately protect the interests” of the members of his class, “and has retained counsel competent and experienced in class and securities litigation,” it said. His attorney is Laurence Rosen of the Rosen Law Firm in Newark, New Jersey. AT&T didn’t comment.