Investors Sue AT&T, Claiming DirecTV Now Fraud

The success AT&T claimed it was having with its DirecTV Now streaming service was "a complete mirage," with the company inflating subscriber numbers with fake customer accounts, and the stock falling when the service's churn issues and unprofitability came to light, said an amended consolidated complaint (docket 19-cv-02892) filed Friday in U.S. District Court in Manhattan. Union pension fund investors alleged AT&T used "improper" sales tactics such as quotas and heavy pressure on its sales force to artificially inflate DirecTV Now subscriber numbers and create "an unsustainable house of cards," while the company downplayed how much it was relying on discounting and promotions. The suit asks for a determination the defendants violated the Securities Act and/or the Exchange Act, and for unspecified damages. The carrier emailed Monday it "plan[s]to fight these baseless claims in court.”