Cases

City of Sunrise Firefighters' Pension Fund, et al. v. Oracle Corporation, et al.

Court: United States District Court for the Northern District of California
Case Number: 3:18-cv-04844
Class Period: 05/10/2017 - 03/19/2018
Case Contacts: David R. Stickney, Mark Lebovitch, Avi Josefson, Scott R. Foglietta

Securities class action lawsuit filed on behalf of BLB&G client the City of Sunrise Firefighters’ Pension Fund against Oracle Corporation (“Oracle” or the “Company”) (NYSE: ORCL), and certain of its executives (collectively, “Defendants”).  The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b 5 promulgated thereunder, 17 C.F.R. § 240.10b-5, on behalf of investors who purchased Oracle’s stock between May 10, 2017 and March 19, 2018, inclusive (the “Class Period”).

The Complaint alleges that, during the Class Period, Defendants violated provisions of the Exchange Act by issuing false and misleading press releases, filings with the U.S. Securities and Exchange Commission (“SEC”), and statements during investor and analyst conference calls.

Oracle is one of the world’s largest software companies.  Among other things, the Company offers both on-premises and cloud solutions to a variety of end users.  Historically, Oracle’s revenues were driven by the sale of the Company’s on-premises software services, but those revenues have stagnated in recent years as customers shifted to cloud-based programs.

Throughout the Class Period, Defendants misrepresented the true drivers of the Company’s cloud revenue growth.  In particular, Defendants falsely attributed the Company’s revenue growth in its cloud segment to a variety of factors and initiatives, including, among other things, Oracle’s “unprecedented level of automation and cost savings,” as well as the Company being “customer-focused” and “intimate partners with our customer.”  In truth, Oracle drove sales of cloud products using threats and extortive tactics.  The use of such tactics concealed the lack of real demand for Oracle’s cloud services, making the growth unsustainable and ultimately driving away customers.  Among other things, the Company threatened current customers with “audits” of their use of the Company’s non-cloud software licenses unless the customers agreed to shift their business to Oracle cloud programs.

The truth was revealed on March 19, 2018, when the Company disclosed that cloud revenue growth had stagnated and forecasted significantly slower sales growth for its cloud business than its competitors.  Following these disclosures, analysts and market commentators connected Oracle’s poor financial performance to its improper sales tactics.  As a result of these disclosures, the price of the Company’s stock declined significantly.

If you wish to discuss this Action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at 212-554-1493, or via e-mail at avi@blbglaw.com.

Other Cases of Interest

  • New Senior Investment Group, Inc.
    Delaware Court of Chancery Mark Lebovitch, David Wales, David MacIsaac, John Vielandi
  • Apollo Education Group
    District of Arizona David R. Stickney, Brandon Marsh
  • Allergan, Inc. (Proxy Violation)
    Central District of California Mark Lebovitch, Jeremy P. Robinson, Michael D. Blatchley, Richard D. Gluck, Edward G. Timlin
  • Quality Systems, Inc.
    Central District of California Gerald H. Silk, Avi Josefson, Benjamin Galdston
  • Oracle Corporation
    Northern District of California David R. Stickney, Mark Lebovitch, Avi Josefson, Scott R. Foglietta
  • Safeway, Inc.
    Delaware Court of Chancery Mark Lebovitch, Jeroen van Kwawegen, Edward G. Timlin
  • STEC, Inc.
    Central District of California, Southern Division David R. Stickney, Benjamin Galdston
  • News Corp.
    Delaware Chancery Court Mark Lebovitch, Brett M. Middleton
  • Virgin Media, Inc.
    County of New York: Commercial Division Mark Lebovitch, Jeroen van Kwawegen