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Accounting Scandal Hits Oracle Cloud


Oracle has been in a tight race with rivals, like Salesforce and SAP, to provide cloud services to the enterprise. But a lawsuit filed on Wednesday (June 1) says Oracle could be in hot water over its own use of the cloud.

According to reports, the company was hit with a lawsuit by a former senior finance manager accusing the company of manipulating accounting data within its cloud services unit. The suit, filed in San Francisco, alleges Oracle fired the manager, Svetlana Blackburn, for refusing to “fit square data into round holes,” she said in court documents.

Blackburn claims Oracle was attempting to make its Cloud Services financial results look stronger than they were.

Oracle has denied the allegations. “We don’t agree with the allegations and intend to vigorously defend the matter,” a spokesperson for the company said.

But the lawsuit claims Blackburn’s managers pressured her to add millions of dollars worth of accruals for business without evidence that those numbers would ever actually roll in.

Reports pointed to the pressure Oracle and other software companies face to migrate to the cloud as their enterprise clients are doing the same. The company’s most recent earnings report, for Q1 2016, showed $6.35 billion in revenue earned by its in-house software solutions; cloud services, meanwhile, made up 8 percent of its total revenue at $735 million.

Still, Oracle’s cloud services are expanding. The company reported 40 percent growth in this business unit last quarter, according to reports.

According to court documents, Blackburn was fired in October of last year, one month after the alleged manipulation of financial data began.


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