A Oracle Corp. shareholder has filed suit in San Mateo County Superior Court alleging that CEO Larry Ellison used inside knowledge of the corporation's finances to sell stock for an inflated profit.
The complaint, filed by shareholder Max Katz in San Mateo County Superior Court on Friday, states that Ellison sold more than 29 million shares of Oracle stock for nearly $900 million between Jan. 22 and Jan. 31 of this year.
At that time, the Redwood City-based software company was predicting an increase in earnings per share and product sales in the third quarter of the financial year, and Ellison was able to sell for as much as $32 each.
On March 1, however, the company revealed that it would instead be posting declines in revenue and earnings per share for the third quarter. Its stock fell to $16.88 by the close of trading the next day.
Katz' complaint, filed on behalf of Oracle Corp., alleges that Ellison, as the company's founder and largest shareholder, and as an active, "hands-on manager," was in a position to know at the time of his stock sales that the company could not possible meet its optimistic revenue projections.
The stock sales were also out of character for Ellison, according to the complaint, because he had not sold any stock for nearly five years.<
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