Oracle's Ellison sued for insider trading
Dumped shares ahead of the curve
San Diego shysters Milberg Weiss Bershad Hynes & Lerach filed suit in US District Court in San Francisco against Oracle and its CEO Larry Ellison Friday, claiming that the company exaggerated its sales expectations and the promise of its still-buggy 11i software suite, according to wire reports.
Ellison, it's claimed, illegally dumped $900 million in shares during Q3, anticipating a stock devaluation virtually guaranteed by the lackluster quarterly report the company was soon to release.
The plaintiff, Local 144 Nursing Home Pension Fund, bought approximately 50,000 shares of Oracle stock at prices ranging from $27.45 to $32.70.
On Friday the shares were going for a piddling $16.38, or roughly half what lucky Ellison sold his for. The fund managers undoubtedly feel that if they had known what Ellison can't have helped knowing last quarter, they'd have dumped their holdings as well.
The suit also claims that savings which the company chirped about and attributed to implementing 11i were in fact the result of sacking more than 2,000 employees, and that Ellison knew 11i was "fraught with massive technical problems, including giant gaps in its CRM modules, and required expensive systems integration work to implement."
"The allegations... are entirely without merit and will be defended vigorously," Oracle flack Jennifer Glass said Friday. ®