(CN) - Oracle will better police its corporate governance to settle claims that rogue directors cost the software giant more than $100 million in settlements after it overcharged the U.S. government for decades, a federal judge ruled.
The May settlement, which U.S. District Judge Richard Seeborg approved Wednesday, calls for Oracle to continue to or to implement corporate governance measures for three years.
Such measures include requiring Oracle's board of directors to "at least once annually discuss developments under the federal False Claims Act and the efficacy of the Company's systems and procedures to comply with the False Claims Act, including whether any modifications are necessary or appropriate," according to the agreement.
It settles a complaint filed by shareholder Scott Ozaki in 2011, alleging that Oracle's overcharging of the government had violated the False Claims Act. According to the Ozaki complaint, while Oracle should have charged the federal government "the lowest price it charged any of its private customers, Oracle fleeced the federal government by hundreds of millions of dollars by overcharging for these products, in some cases overcharging the federal government by more than 50 percent."
Oracle's board will now annually review any claims of False Claims Act violations made by employees on a "hot-line" that the company already put into place.
The settlement states that the board must oversee compliance with a General Services Administration Multiple Award Schedule, and "provide annual training to persons currently in charge of or directly involved in negotiating the GSA Schedule."
One year after the approval of the settlement, "Oracle's Legal Department and/or Internal Audit shall conduct a review of Oracle's current policies, practices, and procedures for compliance with applicable GSA regulations relating to the GSA Schedule, and report to Oracle's Board of Directors, or a Committee of Oracle's Board of Directors, on its findings and any recommendation," the deal states.
Ozaki, other shareholders and Oracle agree in the settlement that a "dismissal of the derivative actions shall act to bar the prosecution, derivatively on behalf of Oracle, of any claims duplicative of those set forth in, or that could or might have been set forth in, the Derivative Actions, or any claims that contain any portion of the released claims."
The settlement states that it may not "be used as an admission by or against the defendants, or any of them, of any fault, wrongdoing, or liability whatsoever."
Oracle will additionally pay plaintiffs' counsel roughly $1.9 million, according to the deal.
Plaintiffs Lisa Galaviz and Philip Prince were represented by Cotchett, Pitre & McCarthy. Kevin Seely with Robbins Arroyo had represented Ozaki. Oracle had been represented by Jordan Eth with Morrison & Foerster.
Follow @jamierossCNS
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
-
Contributor-Test-Post-2024-04-12 April 12, 2024
