A class action complaint was filed on behalf of all persons who acquired Oracle Corporation (NASDAQ: ORCL, news, msgs) securities between December 15, 2000 and March 1, 2001, inclusive (the "Class Period"). The complaint charges Oracle Corporation and Lawrence J. Ellison, Founder, Chairman and Chief Executive Officer of Oracle with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Oracle is the world's second largest software maker and supplies computer software for enterprise information management systems.
The class action complaint alleges that at the beginning of the Class Period, defendants represented that Oracle would have sequential EPS growth of 9%, or $0.12, and revenue of over $2.9 billion for its Q3 2001. Defendants assured investors that Oracle's new 11i Suite required no programming systems integration to implement the product and that using the product internally saved the Company $ 1 billion. However, defendant Ellison actually knew that the Suite was fraught with massive technical problems, including giant gaps in its CRM modules, and required expensive systems integration work to implement. Ellison also knew that Oracle's so-called billion dollar savings was not the result of the synergies created by Oracle's 11i product, but rather, his decision to terminate more than 2,000 employees, many of whom would "support" Oracle's new software. Throughout January and February 2001, defendants repeatedly stated that Oracle's Q3 2001 estimates were easily achievable, that Oracle's pipeline was "never stronger," its applications growth was "accelerating," its database and application sales were rapidly growing and that the slowing economy was showing no impact on Oracle's Q3 2001 performance. During this period defendant Ellison sold nearly $900 million worth of his own Oracle shares at prices as high as $32 per share, or 50% higher than the price to which Oracle shares dropped as Oracle's true prospects began to reach the market.
On March 1, 2001, Oracle revealed that, contrary to prior assurances by defendants of Oracle's continuing "strong" revenue and EPS growth, including defendants' assurances less than two weeks earlier that demand remained strong, Oracle would post a major revenue shortfall and EPS declines, sending Oracle's shares into a free fall. This disclosure shocked the market, causing Oracle's stock to decline to less than $17 per share before closing at $16.88 per share on March 2, 2001, on record volume of more than 221 million shares. The complaint alleges that as a result of the defendants' conduct, plaintiff and other members of the Class suffered damages.
Plaintiff seeks to recover damages on behalf of all those who purchased Oracle common stock during the Class Period, excluding defendants and their affiliates.

Update

The case is still in progress. The claims administrator for Oracle Corporation is Gilardi & Co. LLC. You can view the Notice of Pendency of Class Action which has been sent to Class Members by going to www.classact@gilardi.com or write to Oracle Securities Litigation, Notice Administrator, c/o Gilardi & Co. LLC, P.O. Box 8040, San Rafael, CA 94912-8040, to speak to a claims representative call (415) 461-0410.