Full Impact ‘Yet Unknown’ of AT&T’s Lead Cables, Says Newest Shareholder Suit

The investigation of the potential impact of AT&T’s lead cables and the cost of "remediation" is ongoing, and the full impact that AT&T’s wrongdoing will have on the company “is yet unknown,” alleged AT&T shareholder Leon Peng in his complaint Thursday (docket 1:24-cv-00132) in U.S. District Court for Delaware in Wilmington.

Peng’s was the latest in a series of shareholder derivative lawsuits seeking to hold AT&T and Verizon and their current and former officers and board members accountable for not coming clean about the companies’ ownership of toxic lead cables. “As only recently became public knowledge,” AT&T for decades “has left toxic lead-sheathed cables buried in the ground, running under water and dangling overhead” across the U.S., said the complaint.

AT&T’s policy “allowed these cables to contaminate groundwater and pose significant potential health risks to both the residents and the AT&T workers exposed to the lead that these wires leached,” said the complaint. Under the leadership of the individual defendants, including current and former AT&T CEOs John Stankey and Randall Stephenson, AT&T “kept this policy hidden, concealing it from both those who could be impacted by the lead and from investors, in violation of its disclosure obligations and fiduciary duties,” it said.

Though AT&T failed to remove the cables, “it represented to the investing public that it complied with environmental, health, and safety regulations and was dedicated to employee welfare and safety, as well as the welfare of the environment and communities AT&T serves,” said the complaint. The individual defendants “repeatedly represented” that AT&T was committed to supporting employees in meeting their environment, health and safety obligations by providing necessary and appropriate training, job aids and resources, it said.

The defendants made “materially false” or misleading statements “and failed to disclose material adverse facts about AT&T’s business, operations, and prospects,” said the complaint. They failed to disclose to shareholders and the public that AT&T owns cables throughout the U.S. that are sheathed in toxic lead, “harming AT&T employees as well as members of the public,” it said.

AT&T also failed to disclose that the lead cables “were degrading and leaking into the environment, posing a significant risk not only to public health but also to the environment,” said the complaint. AT&T faces “potentially significant risks of litigation, regulatory enforcement and penalties, and reputational harm,” it said.

AT&T knew about the “damage and risks” posed by its lead cables, “but failed to disclose them as a possible threat to employee and community safety,” said the complaint. AT&T also “failed to maintain internal controls,” it said. Its public statements, including those in its securities filings, “were materially false and misleading,” it said.