After losing $1.6billion yesterday, Larry Ellison remains world's 7th richest man

Larry Ellison's net worth drops $1.6 Billion after former Oracle employee files Whistleblower Lawsuit

 

Oracle chairman Larry Ellison

Oracle ORCL +0.59% founder and chairman Larry Ellison lost $1.6 billion Thursday as the stock market reacted to a whistleblower lawsuit filed against his software giant on Wednesday. A former Oracle employee claims that she was fired after speaking up about incorrect accounting at Oracle Cloud Services, according to a complaint filed in the U.S. District Court in San Francisco.
After the news broke Wednesday night, Oracle stock dropped in after-hours trading and opened Thursday down nearly 4% from yesterday. The stock hit a low of $38.08 around noon Eastern and closed at $38.66, ending the day as it started, off 4%. Because the bulk of Ellison’s net worth is in Oracle stock, a small drop in the stock can impact his net worth by billions of dollars. Ellison ended the day with a $48.1 billion fortune, holding on to his rank as the world’s seventh richest person despite losing $1.6 billion.
In her whistleblower complaint, former Oracle senior finance manager Svetlana Blackburn says she was fired after refusing to do accounting she thought was improper and threatening to speak out about it. In the complaint, she claims that Oracle management “was trying (and trying to push her) to fit square data into round holes, in an effort to bolster Oracle Cloud Services financial reports that would be paraded before company leadership as well as the investing public.”
Oracle spokesperson Deborah Hellinger wrote in a statement: ”We are confident that all our cloud accounting is proper and correct. This former employee worked at Oracle for less than a year and did not work in the accounting group.”
The market’s negative reaction to the lawsuit highlights the important of Oracle’s small but growing cloud business. In its third quarter earnings report in March, Oracle announced that its total cloud revenues were $735 million, up 44% in constant currency from the same period a year earlier. Cloud revenue made up just 8.2% of Oracle’s total $9 billion revenue in the quarter. “Our cloud business is now in a hyper-growth phase,” said Oracle CEO Safra Catz, who ranks No. 28 on Forbes’ list of America’s Richest Self-Made Women. Because Catz owns so much less stock than Ellison, her net worth only dropped about $10 million to an estimated $505 million at the end of the day Thursday.

In the complaint, Blackburn claimed that she was instructed to “add millions of dollars in accruals to financial reports” by her supervisors. Blackburn said she believed the data would be used to “paint a rosier picture than actually existed on the ground” and threatened to speak out. According to the complaint, executives above Blackburn allegedly added the accruals despite Blackburn’s misgivings, and her supervisor told her she was “irritating” for complaining about it. Blackburn says she was fired weeks later on October 15, 2015, despite having received a positive performance review in August 2015.
In her statement, Hellinger said that Blackburn was “terminated for poor performance.” Oracle plans to counter-sue for malicious prosecution.
Blackburn’s attorneys, Daniel Velton and VJ Chetty, could not be reached for additional comment in time for publishing.

Source: Forbes