The Securities and Exchange Commission (SEC) has accused AT&T of selectively disclosing material nonpublic information regarding poor smartphone sales to research analysts, in violation of the regulation that requires such information to be made public.

In March 2016, three AT&T investor relations executives made a round of calls to 20 research analysts, the SEC said, disclosing information regarding internal company data showing a steeper-than-expected decline in smartphone sales for the first quarter. The internal data regarding the sales was not made public until April, the SEC said, and was disclosed to convince the research analysts to lower their first-quarter revenue estimates for AT&T. The alleged selective disclosures violated Regulation Fair Disclosure (FD), which requires information that is material to a company’s performance be distributed to the public.

“Regulation FD levels the playing field by requiring that issuers disclosing material information do so broadly to the investing public, not just to select analysts,” said Richard Best, director of the SEC’s New York Regional Office in a press release Friday. “AT&T’s alleged selective disclosure of material information in private phone calls with analysts is precisely the type of conduct Regulation FD was designed to prevent.”

According to the lawsuit, filed in the U.S. District Court for the Southern District of New York, AT&T investor relations executives Christopher Womack, Kent Evans, and Michael Black made the calls at the request of the company’s chief financial officer, who told them to “work the analysts who still have equipment revenue too high.” The company’s director of investor relations urged them to induce the analysts to lower their estimates so AT&T would not have a quarterly revenue miss, which would have been its third in a row, the SEC noted.

The SEC alleged the AT&T executives who called research analysts about the smartphone sales figures “knew or recklessly disregarded that the internal data they communicated was material nonpublic information when they selectively disclosed that information in one-on-one calls with the analyst firms.”

As a result of the calls, many of the analysts lowered their revenue estimates for AT&T for the first quarter of 2016 by $640 million to as much as $1 billion, the SEC said.

Womack, Evans, and Black are also each facing charges.

In a statement, AT&T denied the company violated Regulation FD and that its analysts imparted nonpublic information. The company also stated the information on smartphone sales discussed with research analysts did not have a material impact on its earnings, because AT&T’s core business is the sale of wireless service, not equipment.

AT&T stated the lawsuit “represents a significant departure from the SEC’s own long-standing Regulation FD enforcement policy and is inconsistent with the testimony of all who participated in these conversations.”

“Tellingly, after spending four years investigating this matter, the SEC does not cite a single witness involved in any of these analyst calls who believes that material nonpublic information was conveyed to them,” the company said.