Posted by: Shayna Garlick
Oracle database administration, Oracle development
Lately, Oracle’s accusations against SAP – - everything from corporate theft to massive illegal downloading – - have been all the legal buzz in the world of the software giants.
That is, until now.
The tables seem to have turned, with Oracle finding itself on the opposite side of an accusation. Last week, a federal judge ruled that CEO Larry Ellison allegedly withheld or destroyed important evidence in a previously twice-dismissed shareholder lawsuit against the company. The lawsuit alleges that Ellison and Oracle knowingly made false statements and misled investors about the company’s 2001 second-quarter financial results and problems with a software product (the 11i Suite).
What is Ellison accused of destroying?
When the shareholders, Nursing Home Pension Fund, asked for 135 hours of recorded interviews from 2001 and 2002, Ellison failed to include any transcripts from 2001. (The interviews with Ellison were bound for the book Softwar: An Intimate Portrait of Larry Ellison and Oracle.) The recordings were later found to be destroyed. Ellison also apparently didn’t keep all of the emails he was instructed to preserve after the original suit was filed.
But the lack of evidence doesn’t mean America’s fourth-richest man is off the hook. In fact, US District Judge Susan Illston has decided just the opposite:
“It is appropriate to infer that the e-mails and software materials would demonstrate Ellison’s knowledge of, among other things, problems with Suite 11i, the effects of the economy on Oracle’s business and problems with defendants’ forecasting model,” she wrote in an order released last week.
As ZDNet’s Dennis Howlett points out, Ellison is no stranger to insider dealing troubles. Howlett highlights a case in 2005 in which Ellison agreed to pay $100 million to charity after being accused of engaging in insider trading.
Even so, could this latest blow hurt Oracle’s credibility going forward, especially as the company seeks over $1 billion in damages from SAP? And, if Ellison is found guilty, do you think there’s any chance his punishment will actually fit the crime?