A lawsuit filed in the US against Oracle, together with its chairman and chief executive Larry Ellison, alleges massive insider trading and misrepresentation of sales prospects.
A San Diego-based law firm, Milberg Weiss Bershad Hynes & Lerach, no stranger to such cases, filed the class-action lawsuit on behalf of the Local 144 Nursing Home Pension Fund, which claims it lost at least US$1m when Oracle - and Ellison - overstated the earnings potential of its E-Business Suite and understated operating problems, causing shares in the software company to decline sharply.
At issue is Oracle's claim that its 11i Suite required no programming systems integration to implement and that by using the product internally, the company saved US$1bn.
The suit claims that Ellison knew that the 11i Suite "was fraught with massive technical problems including giant gaps in its CRM [customer relationship management] modules, and required expensive systems integration work to implement".
The suit also alleges that Oracle's billion-dollar savings was not the result of synergies created by 11i but from the termination of 2,000 employees.
Oracle officials did not respond to a request for comment by publication time.
