Overview
- A proposed class action was filed Jan. 14 in New York state court in Manhattan on behalf of investors who bought $18 billion of Oracle notes and bonds on Sept. 25.
- Plaintiffs allege Oracle had already planned substantial additional borrowing despite offering language that it "may" need more, asserting strict liability under federal securities laws.
- The complaint names Oracle, Larry Ellison, former Chief Executive Safra Catz, Chief Accounting Officer Maria Smith, and 16 underwriting banks as defendants.
- Investors point to Oracle’s return seven weeks later for about $38 billion in loans to fund data centers in Texas and Wisconsin supporting the OpenAI agreement, saying prices fell and yields rose on Oracle debt.
- Oracle shares fell roughly 5% after the filing, the bondholders seek unspecified damages, and the company declined to comment.