Telecommunications giant AT&T agreed to pay $6.25 million as part of a settlement with the Securities and Exchange Commission (SEC) addressing allegations three of its executives fed sensitive financial information to Wall Street research analysts and not investors.

The SEC announced the agreement Monday, along with individual settlements with AT&T investor relations executives Christopher Womack, Michael Black, and Kent Evans for $25,000 apiece. The penalty the company agreed to pay marks a record for violations of Regulation Fair Disclosure (Reg FD).

The allegations, initially brought by the SEC in March 2021, date back to March 2016, when Womack, Black, and Evans learned the company would fall below its expected quarterly results for the third quarter running because of lagging smartphone sales. The executives called about 20 research analysts and shared the company’s sales data and confidential financial information in violation of Reg FD, according to the complaint.

The information was considered material to the company’s financial performance and should have been made public to investors, the SEC contended.

Through the calls, the executives succeeded in convincing the analysts to “substantially” lower their revenue forecasts for the upcoming quarter, which permitted AT&T to “beat the overall consensus revenue estimate” when it reported its results to the public in April 2016, according to the complaint.

“The actions allegedly taken by AT&T executives to avoid falling short of analysts’ projections are precisely the type of conduct Regulation FD was designed to prevent,” said Gurbir Grewal, director of the SEC’s Enforcement Division, in a press release. “Compliance with Regulation FD ensures that issuers publicly disclose material information to the entire market and not just to select analysts.”

AT&T response: “We are committed to following all applicable laws and pleased to have resolution with the SEC,” AT&T said in an emailed statement. “With this settlement, the company and its employees neither admitted nor denied the SEC’s allegations.”