November 23, 2005
A San Mateo Superior Court Judge approved the settlement of a derivative action filed in California against Larry Ellison, CEO of Oracle, Inc.. Story The suit claim that Ellison engaged in insider trading when he sold $900 million of Oracle stock in 2001 shortly before the company issued an earnings warning. In the settlement Ellison agreed to give $100 million to charity and to pay $22 million to the plaintiff's lawyers. Astute observers will note that the Judge refused the first settlement agreement because Oracle was to pay the plaintiff's lawyers rather than Ellison. Joseph Tabacco, a lead attorney for the plaintiff called it an "extraordinary result and.. one that is of great benefit to Oracle." I agree with him on the first claim but not the second. Oracle and its shareholders get nothing. The Judge was responsible for making sure that the plaintiffs agreement to settle is in the best interests of the Oracle shareholders. Only if the suit had a very marginal chance of success should such a settlement have been finalized. Is this what the judge decided? A class action suit, based on federal securities law violations, is still pending in federal court.
TrackBack URL for this entry:
Listed below are links to weblogs that reference Ellison Settles: