Oracle chief sued for stock manipulation

Oracle CEO Larry Ellison, this week, was sued by a disgruntled Oracle

shareholder who claims Ellison and other Oracle executives talked up the stock

and sold $1 billion worth of their company holdings before disclosing the

company would suffer a profit shortfall.

The latter announcement caused a 21 per cent plunge in Oracle shares which

have fallen from $46 to just $16. The shareholder, Hansyorg Blattner, has made

allegations of mismanagement against Ellison and seven Oracle directors in a

lawsuit filed in Delaware.

However, Oracle quickly denied the legitimacy of the case. "The

allegations are entirely without merit and will be defended vigorously,'' said

Oracle spokeswoman Jennifer Glass. Blattner claims Ellison and the directors

artificially inflated the value of shares by making false and misleading

statements about the company's prospects.

According to the litigant the officials were aware of the Oracle’s profit

problems but did not disclose them fearing a drop in the company’s stock

price. Blattner asked the judge to award legal fees and expenses and to require

directors to pay the company damages.

"Defendants should be required to disgorge the gains, which they have

unjustly procured, at the expense of Oracle,'' Blattner said. At least three

similar shareholder lawsuits have been filed in a federal court in California,

seeking class-action status for all Oracle stockowners.