AT&T Accused of Faking DirecTV Now Accounts to Boost Numbers
AT&T misled shareholders about the growth of DirecTV Now as it prepared to merge with Time Warner, says lawsuit.
(Bloomberg) -- AT&T Inc. pressured employees to create fake accounts for its DirecTV Now streaming television service to boost subscriber numbers ahead of its 2018 merger with Time Warner Inc., according to a lawsuit accusing the telecommunications giant of misleading investors.
The company taught and encouraged employees across the country to secretly add the product to the accounts of existing customers without their knowledge, according to an amended complaint filed Friday.
One way employees did that was by pretending to waive a $35 fee that customers paid to upgrade their mobile phones while actually charging the fee and creating as many as three fake DirecTV Now accounts, investors, including the Steamfitters Local 449 Pension Plan, said in the lawsuit, initially filed in Manhattan federal court in April.
“We plan to fight these baseless claims in court,” AT&T said in an emailed statement.
AT&T misled shareholders about the growth of DirecTV Now as it prepared to merge with Time Warner, telling investors that the business was growing while subscribers were actually leaving the service, according to the lawsuit.
“This apparent success was a complete mirage,” the investors said. “Information provided by multiple former employees of AT&T and its affiliates from across the country collectively confirm a wide-ranging fraud, perpetrated at the highest levels of the company.”
The case is Gross v. AT&T Inc., 19-cv-02892, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider
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