UScellular, Execs Misled Investors on Profitability, Suit Says

United States Cellular Corp. and some of its executives falsely touted the company’s ability to counteract a decline in customers, an investment fund’s trustee alleges in a proposed class securities suit.

The common stock of UScellular’s parent company, Telephone and Data Systems Inc., lost more than a quarter of its value when the poor financial results were disclosed, Howard Rensin alleges. Rensin, the trustee of the Rensin Joint Trust, filed the complaint Tuesday in the US District Court for the Northern District of Illinois.

“Postpaid” customers—those with monthly bills for service—made up most of its individual customer accounts, according to ...