Feeds

Oracle fraud suit returns from the dead

Insider trading claims

  • alert
  • submit to reddit

The essential guide to IT transformation

A federal court has reinstated a fraud case against Larry Ellison and two other senior Oracle executives alleging accounting irregularities and suspicious share sales.

The 9th US Circuit Court of Appeals decided that there was enough evidence for the case to go to court, despite it being dismissed on three previous occasions. The case was brought by disgruntled shareholders and centres on action taken as the dotcom bubble imploded at the end of 2000 and beginning of 2001.

The case alleges that problems with Oracle's 11i suite of products and the wider downturn in the economy hit Oracle sales, but the company covered this up. As late as February 2001 the company was claiming the slowdown was having no impact on its business.

Larry Ellison is named along with Oracle CFO Jeff Henley and Edward Sanderson, an Oracle vice president. The case alleges that the database giant falsely claimed $200m in sales and made reassuring noises to the stock market, despite knowing that business was flagging. Oracle made a profit warning on 1 March 2001.

Ellison sold 29m shares for $900m in late January before the bad news became public. This was his first Oracle stock trade in five years. According to the complainant's filing, available for download here, Ellison paid 23 cents per share for these shares and sold them for between $30 and $32.

The judge noted that it is usual to consider what percentage of an individual's total holdings were sold when considering an allegation of insider dealing. Ellison sold just 2.1 per cent of his holding, but made about $900m. But the size of the profit made and Ellison's history of not selling Oracle stock "these factors cast suspicion on the stock trades." Additionally, the sales were made between 22 January and 31 January, just a month before the 1 March profit warning.

The complainant also accuses Oracle of artificially inflating revenues. Oracle is still waiting for a ruling on its attempted takeover of PeopleSoft. ®

Related stories

Oracle execs telling porky pies?
Oracle can't foretell the future
Oracle's Ellison sued for insider trading

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.