AT&T pressured employees to set up phony DirecTV Now accounts ahead of Time Warner merger: suit
Young Woman Watching TV (Shutterstock)

A new lawsuit accuses AT&T of pressuring employees to set up phony DirecTV Now accounts to boost subscription numbers ahead of a $85 billion merger with Time Warner.

The suit filed by a group of investors claims AT&T knowingly told shareholders that DirectTV Now was growing, when subscribers were actually leaving the platform, reported Markets Insider.

"Employees were taught and actively encouraged to convert activation fees that customers traditionally had to pay to upgrade their phones into DirecTV Now subscriptions by waiving the fee," the lawsuit claims.

The suit alleges that sales executives, including president of sales and distribution Brian Shay, knew about the practice and supported those efforts.

The scheme was intended to improve AT&T's position in merger talks with Time Warner, according to the lawsuit.