Oracle's profits prophecy sets lawsuits flying

NEWS Law firms in California and New York yesterday filed new cases against the software company, bringing the total number to a dozen in just five weeks. According to a report on Newsfactor.com, the investors behind the lawsuits are all claiming the same infringements. They claim that Oracle was aware it would miss its Q3 estimates before it issued a warning but that CEO Larry Ellison deliberately inflated share prices when he sold $900m worth of shares a day before the announcement. Oracles shares fell 50 per cent on 2 March after the company warned that earnings per share for the quarter would be ten cents, not 12 cents as analyst had predicted. Further allegations claim that Oracle's current advertising campaign, which claims that the company saved $1bn last year by implementing its own 11i business suite, is untrue, and that cost savings came from axing 3,000 jobs. Investors are also alleging that Oracle marketed the 11i business suite aware that the CRM module contained bugs. In a statement to silicon.com, Oracle said it expected the lawsuits to be consolidated into a single action, but firmly denied the accustations. It said: "The allegations made in these actions are entirely without merit and Oracle will vigorously defend against these or any consolidated action."