Oracle settles shareholders' cloud claims for $17.5 million
- Law Firms
- Lawsuit filed in 2018 took aim at company's statements about its cloud computing business
- Oracle did not admit to the allegations
(Reuters) - Oracle Corp has agreed to pay $17.5 million to settle a shareholder lawsuit alleging the software giant misrepresented the growth of its cloud computing business in 2017 and 2018, the plaintiffs said in a court filing on Monday.
A subsidiary of German fund manager Union Investment led the class action on behalf of investors and asked U.S. District Judge Beth Labson Freeman in San Jose to approve the deal.
A spokesperson for Oracle did not immediately reply to a request for comment. The company and its executives deny wrongdoing.
Shareholders sued Oracle and several executives in 2018, claiming the company tried to make up for its late entrance to the cloud computing market with aggressive sales tactics that created artificial demand.
The judge trimmed the case last year, allowing the plaintiffs to move forward with claims that Oracle omitted information about the source of its growth. She granted class action status in May, and Oracle had sought permission from the 9th U.S. Circuit Court of Appeals to challenge that ruling.
Bernstein Litowitz Berger & Grossmann, the law firm that represented the class, would receive $3.5 million in attorneys' fees if the deal is approved.
The case is In re Oracle Corporation Securities Litigation, U.S. District Court, Northern District of California, No. 5:18-CV-04844.
For shareholders: Mark Lebovitch, John Rizio-Hamilton and Abe Alexander of Bernstein Litowitz Berger & Grossmann
For Oracle: Mark Foster of Morrison & Foerster
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