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Oracle Falls on Lawsuit Alleging Accounting Irregularities
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Shares of Oracle Corporation (ORCL - Free Report) fell 3.97% in yesterday’s trading session, after the company was named in a lawsuit by a former employee.
On Wednesday, Oracle’s former senior Finance Manager, Svetlana Blackburn filed a lawsuit against the company. Blackburn alleged that the company had terminated her service when she resisted some manipulative accounting practices in Oracle’s cloud-computing business.
Oracle in its defense stated that “We are confident that all our cloud accounting is proper and correct. This former employee worked at Oracle for less than a year and did not work in the accounting group. She was terminated for poor performance.”
However, Blackburn, a certified financial analyst, claimed that she had received a positive performance review just a couple of months before she was fired in Oct 2015.
If this was not enough, yesterday evening the company had another lawsuit filed against it, this time by an Oracle investor. Grover M. Klarfeld has alleged Oracle of “improper accounting practices to inflate the company’s cloud-computing revenues by millions of dollars” as per a Wall Street Journal report.
For the last few months, the company has been entangled in one lawsuit after another, raising concerns for its investors. Last week, Oracle lost its six-year old lawsuit against Alphabet (GOOGL - Free Report) . Oracle had sought $9.3 billion as compensation from Alphabet for unauthorized usage of Java APIs in its Android operating system. However, a 10-member jury found no copyright violations by Google. Oracle, however, is planning to appeal against the verdict.
Furthermore, the company is also entangled in a legal battle with Hewlett Packard Enterprise (HPE - Free Report) for the last five years, fresh trials for which started earlier this week. HP Enterprise wants $3 billion in compensation from Oracle for allegedly causing a decline in demand for its Itanium based products.
We believe that owing to these legal battles (some of which are not in the company’s favor), Oracle shares might remain range bound in the near term amid increasing uncertainty.
At present, Oracle carries a Zacks Rank #3 (Hold). A better-ranked technology stock is NetEase, Inc. (NTES - Free Report) , which sports a Zacks Rank #1 (Strong Buy).
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Oracle Falls on Lawsuit Alleging Accounting Irregularities
Shares of Oracle Corporation (ORCL - Free Report) fell 3.97% in yesterday’s trading session, after the company was named in a lawsuit by a former employee.
On Wednesday, Oracle’s former senior Finance Manager, Svetlana Blackburn filed a lawsuit against the company. Blackburn alleged that the company had terminated her service when she resisted some manipulative accounting practices in Oracle’s cloud-computing business.
Oracle in its defense stated that “We are confident that all our cloud accounting is proper and correct. This former employee worked at Oracle for less than a year and did not work in the accounting group. She was terminated for poor performance.”
However, Blackburn, a certified financial analyst, claimed that she had received a positive performance review just a couple of months before she was fired in Oct 2015.
If this was not enough, yesterday evening the company had another lawsuit filed against it, this time by an Oracle investor. Grover M. Klarfeld has alleged Oracle of “improper accounting practices to inflate the company’s cloud-computing revenues by millions of dollars” as per a Wall Street Journal report.
For the last few months, the company has been entangled in one lawsuit after another, raising concerns for its investors. Last week, Oracle lost its six-year old lawsuit against Alphabet (GOOGL - Free Report) . Oracle had sought $9.3 billion as compensation from Alphabet for unauthorized usage of Java APIs in its Android operating system. However, a 10-member jury found no copyright violations by Google. Oracle, however, is planning to appeal against the verdict.
Furthermore, the company is also entangled in a legal battle with Hewlett Packard Enterprise (HPE - Free Report) for the last five years, fresh trials for which started earlier this week. HP Enterprise wants $3 billion in compensation from Oracle for allegedly causing a decline in demand for its Itanium based products.
We believe that owing to these legal battles (some of which are not in the company’s favor), Oracle shares might remain range bound in the near term amid increasing uncertainty.
At present, Oracle carries a Zacks Rank #3 (Hold). A better-ranked technology stock is NetEase, Inc. (NTES - Free Report) , which sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>