
A Florida pension fund Friday filed a class-action lawsuit against Oracle, alleging the software giant defrauded investors by misrepresenting its cloud sales figures.
The City of Sunrise Firefighters Pension Fund filed the lawsuit against Oracle, and some of its executives directly, in a federal court in California. Attorneys for the fund allege Oracle repeatedly conveyed market demand for its cloud products when the company was really driving sales with pressure tactics that were unsustainable.
The suit focuses on the date of March 19, 2018, when Oracle disclosed that cloud revenue growth had stagnated and said it expected “slower sales growth for its cloud business than its competitors.” In investor and analyst calls, press releases, and filings with the U.S. Securities and Exchange Commission, Oracle "misrepresented the true drivers of the company's cloud revenue growth," attorneys for the fund said in a statement.
[Related: Here's Why Some Partners Think Oracle Cloud Sales Numbers Are Misleading]
Oracle repeatedly conveyed to investors that its cloud growth stemmed from unique automation technology and a customer-focused approach, according to the plaintiff’s statement. But it was really "threats and extortive tactics" that drove cloud revenue, the statement said.
The lawsuit alleges Oracle's tactics included threats to audit customers with on-premises software licenses, followed by offers to resolve those disputes with deals for cloud services.
"The use of such tactics concealed the lack of real demand for Oracle's cloud services, making the growth unsustainable and ultimately driving away customers," the statement said.
Oracle couldn't sustain that artificial growth, and cloud sales finally stagnated by March, the plaintiff said.
The class-action lawsuit can include any investors who purchased Oracle stock between May 2017 and May 2018, according to the lawsuit.
Oracle spokeswoman Deborah Hellinger told CRN in a statement that the “suit has no merit and Oracle will vigorously defend against these claims.”
related stories
Video
trending stories
sponsored resources

Trend Micro
Managed Security 360

HubStor
Cloud Backup 360

Cysurance
Cyber Insurance 360

Tenable
Cyber Risk 360

Dell Technologies
Dell Technologies Cloud Learning Center

EPOS
EPOS

Fujifilm
Fujifilm

Application Integration 360

Mimecast
Mimecast

Comcast
Comcast Business Learning Center

Dell Technologies
Dell Technologies Server Learning Center

WatchGuard
WatchGuard

Hitachi Vantara
Hitachi Vantara

Dell Technologies
Dell Technologies Storage Learning Center

Carbonite
Cloud Storage 360

Sophos
Sophos Cybersecurity Learning Center

Webroot
Webroot Learning Center

BlackBerry
BlackBerry Learning Center

NPD
Industry Trends 360

Symantec
Symantec Business Security Learning Center

Channel Chief Showcase

Acer
Remote Workforce 360

Sherweb
Sherweb

APC by Schneider Electric
Digital Services for Edge Learning Center

VMware

StorageCraft
Disaster Recovery Learning Center

Vertiv
Edge Computing Learning Center

Wasabi
Wasabi

Dell Technologies
Dell Technologies Hybrid Cloud Learning Center

Cradlepoint
5g for Business 360

Comm100
Collaboration & Communications 360

Veeam
Veeam

Trend Micro
Trend Micro Learning Center

eSentire
Managed Detection and Response 360
