City of Sunrise Firefighters’ Pension Fund v. Oracle Corporation et al 3:18-cv-04844 — On August 10, 2018, investors sued Oracle Corporation (Oracle, ORCL, or the Company) in United States District Court, Northern District of California. Plaintiffs in the Oracle class action (ORCL Class Action) allege that they acquired Oracle stock at artificially inflated prices between May 10, 2017 and March 19, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the ORCL Lawsuit, please contact us today.
Summary of the Allegations
Oracle (NYSE:ORCL) is a self-described “global provider of enterprise cloud computing.”
As such, it says it “provides industry-specific applications for running a customer’s core business, on premises or in the cloud, for more than two dozen industries.” Specifically, the Company claims it has 430,000 customers in 175 countries, and 25,000 partners.
Oracle also says that it employs more than 138,000 people, including 40,000 developers and engineers; 16,000 support and services specialists, who speak 29 languages; and 19,000 implementation consultants.
Summary of Facts
Oracle and six of its senior executives, officers and/or directors (the “Individual Defendants”) now stand accused of deceiving investors by lying and withholding critical information about Oracle’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about the Company’s growth in cloud revenue from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Oracle stock to trade at artificially inflated prices during the time in question.
The truth came out on March 19, 2018, when Oracle revealed that its cloud revenue growth “had stagnated and forecasted significantly slower sales growth for its cloud business than its competitors.”
According to the August 10 complaint, in the wake of this revelation, “market researchers and the media connected Oracle’s poor financial performance to its aggressive sales tactics.”
A closer look…
The August 10 complaint also alleges that the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For instance, in a press release that was also filed on a form with the SEC on June 21, 2017, the Company reported that, “quarterly cloud revenues were up 58% to $1.4 billion.”
Then on a September 14, 2017, conference call with analysts and investors, one of the Individual Defendants said in pertinent part: “Customer adoption of our cloud products and services continue to be very, very strong.”
Finally, on a form filed with the SEC on September 18, 2017, the Company referred to: “Higher growth of our cloud SaaS and cloud PaaS and IaaS revenues as customer preferences have pivoted to the Oracle Cloud for new deployments and as customers migrate to and expand with the Oracle Cloud for their existing on-premise workloads.” Oracle also attributed its cloud revenue growth to “increased… investments in and focus on the development, marketing and sale of our cloud-based applications, platform and infrastructure technologies.”
What Oracle failed to disclose, however, was that in reality it used “improper, coercive sales practices” to promote its cloud revenue growth.
Impact of the Alleged Fraud on Oracle’s Stock Price and Market Capitalization
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is October 9, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Oracle common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.