Ellison $100 Million Settlement Invalidated

The presiding judge in Larry Ellison’s insider trading case has a problem with Oracle paying lawyers $24 million in fees.

Several lawsuits against Oracle claim that Mr. Ellison sold $900 million in stock before share value plummeted in 2001. He had agreed to settle an insider trading suit by paying $100 million to charity.

Part of the settlement would have Oracle pay $24 million in legal fees. The San Francisco Chronicle reported on the judge’s reaction:

San Mateo County Superior Court Judge John Schwartz said he was bothered by provisions of the settlement that would have paid attorneys $24 million.

“The $24 million jumped off the page. At first, I thought it was a typo,” Schwartz said at the Redwood City hearing. “Then I kept reading and said, ‘No, they’re not joking.’ “

Mr. Ellison would not admit to any wrongdoing as part of the settlement. But if he pays the legal fees, his attorneys believe that could be construed as an admission of guilt. The report says a Florida shareholder filed an objection to the company paying those fees.

Judge Schwartz agreed, and now Mr. Ellison will have to rework the settlement. But other litigation looms regardless of how a new settlement may be reached. Shareholders have sought class-action status in a related federal suit filed in San Francisco.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.

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