Long ago, like two years ago, there was a major scandal that AT&T, Verizon, and other telecom giants had forgotten to remove miles of cables wrapped in lead, stretching across rivers, buried in soil, and hanging overhead on poles. These cables, once essential, now pose a danger to the environment.
That’s because of the lead.
As the cables aged and decayed, the toxic metal began to break apart, spreading into places where people live, work, and play, the WSJ reported in 2023. Tests found lead along major rivers like the Mississippi and the Passaic, and in unexpected places – beneath a fishing spot in Louisiana, a playground in New York, and near a school in New Jersey.
Then, a group of several public retirement systems from New York City, among which – the New York City Police Pension Fund, New York City Fire Department Pension Fund, filed a lawsuit against AT&T and five of its executives. They claimed that the company misled investors by making false or incomplete statements between July 2018 and July 2023.
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According to the plaintiffs, AT&T failed to tell investors about the environmental and financial risks tied to a large number of old telephone cables covered in toxic lead. These lead-covered cables were left in place when AT&T upgraded its network, and the plaintiffs argued that the company knew or should have known that the cables were leaking lead into the environment.
The plaintiffs claimed AT&T had made misleading public statements about cost savings from retiring old copper wires, its environmental responsibility, and its employee safety practices. They argued that AT&T executives downplayed or hid the risks of leaving lead cables in place, even though the company presented itself as committed to safety and environmental protection.
The plaintiffs sued under federal securities laws, arguing that these omissions and misleading statements caused financial harm to investors who bought AT&T securities during that time.
Recently, Chief Judge David C. Godbey dismissed the case. He ruled that the plaintiffs did not meet the strict legal standards required for securities fraud. Most importantly, the judge found that the complaint did not show that any of the defendants acted with the intent to mislead investors or were severely reckless in what they said or failed to say. The court also said that the plaintiffs’ claims were often too general and did not clearly link specific executives to specific misleading statements.
The judge also dismissed the related claims that the executives were “control persons” responsible for the company’s actions, because the main fraud claims were not strong enough to move forward.
The dismissal is without prejudice, meaning the plaintiffs are allowed to try again. They have 30 days from the date of the order (June 16, 2025) to file an amended complaint with more detailed allegations. If they do not amend the complaint within that time, the case will be dismissed permanently.
Source: Phone Arena
