Claims Software Systems Company Tried to Inflate Growth Rates In Cloud Computing Services

A former senior finance manager with Oracle Corp. claimed in a lawsuit that the software giant fired her after she threatened to blow the whistle on possible unlawful accounting practices in its cloud-computing business.

The former employee, Svetlana Blackburn, in a suit filed Wednesday in federal court in the Northern District of California, claimed her finance job in Oracle’s cloud-computing business “came to an abrupt end because she resisted, refused to engage in and threatened to blow the whistle on accounting practices she reasonably believed to be unlawful.”

Her suit also led to a series of statements on Thursday by five law firms that are commencing investigations into possible securities fraud on behalf of shareholders, and some intend to file class-action lawsuits against Oracle.

Blackburn’s suit alleges that “upper management was trying 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.“

It accuses Oracle of violating federal whistleblower protections against retaliation and wrongful termination.

According to Blackburn, she received a positive performance review in August 2015, but that in September, “her supervisors charted a course that veered from legal, ethical and company standards.” She was fired in October 2015.

This wouldn’t be the first time that the company had been accused of false accounting. Oracle was almost bankrupted in 1990, four years after co-founder and CEO Larry Ellison had floated the company on the stock exchange, when a revenue recognition scandal revealed that the company had artificially inflated its revenues.