Shareholders’ Lawsuit Alleges AT&T; Chief, Firm Misled Them
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AT&T; Corp. and Chairman C. Michael Armstrong are being sued by shareholders who say the biggest U.S. phone and cable television firm misled investors about its financial strength, lawyers said.
The suit on behalf of investors who bought AT&T; shares from October 1999 to May comes as the company is planning to split into four stocks in an effort to reverse the slide of its share price.
The plaintiffs say AT&T; violated securities laws so it could complete an April initial public offering of AT&T; Wireless tracking stock on favorable terms and close its June acquisition of MediaOne Group Inc. without paying a $3.7-billion cash guarantee due if AT&T; stock fell below $57, according to the suit that law firm Milberg Weiss Bershad Hynes & Lerach said it filed in a federal court in New Jersey.
An AT&T; spokesman said the company hasn’t seen the suit and was unable to comment. Shares of AT&T; rose 13 cents to $21.94 on the NYSE.
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