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Oracle hit with whistle-blower lawsuit over accounting in cloud services

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Oracle Corp was sued on Wednesday by a former senior finance manager who claimed she was terminated in retaliation for complaining about improper accounting practices in Oracle’s cloud services business.

Shares of Oracle fell about 2.6 percent to $39.23 in after-hours trading.

In a complaint filed in U.S. District Court in San Francisco, the former executive, Svetlana Blackburn, accused upper management of trying to push her to “fit square data into round holes” to make Oracle Cloud Services’ results look better.

“We don’t agree with the allegations and intend to vigorously defend the matter,” Oracle spokeswoman Deborah Hellinger said.

Blackburn said her bosses instructed her to add millions of dollars of accruals for expected business “with no concrete or foreseeable billing to support the numbers,” and said executives above her added accruals on their own.

Like many legacy software companies, Oracle faces a dilemma with the move to cloud computing – essentially software in servers in data centers accessible through the internet rather than traditional packaged software. The older type of software still generates massive profits for Oracle.

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Last quarter, Oracle’s traditional on-premises software sales shrank slightly compared with a year earlier, but still generated $6.35 billion in revenue, 70 percent of total revenue for the quarter. In comparison, cloud revenue was $735 million, or 8 percent of the revenue, but grew by 40 percent.

The Redwood City, California-based company has come under considerable pressure from younger and smaller cloud-first companies such as Salesforce.com Inc , whose chief executive delights in mocking Oracle’s cloud strategy.

Oracle has invested aggressively in its cloud business over the last few years in a bid to gain market share in the cloud. Safra Catz, Oracle’s co-chief executive, said in March that the cloud business was in a “hyper-growth phase.”

Blackburn said Oracle terminated her employment on Oct. 15 last year, one month after the alleged wrongdoing began and two months after she received a positive performance review.

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She said Oracle had come to view her as “more of a roadblock than a team player who would blindly generate financial reports using improper bases in order to justify the bottom lines that her superiors demanded to see.”

V.J. Chetty, a lawyer for Blackburn, declined additional comment.

Blackburn’s lawsuit also accused Oracle of violating the anti-retaliation provisions of the federal Sarbanes-Oxley corporate governance and Dodd-Frank financial-reform laws. It seeks punitive damages, double back pay and other remedies.

(Reporting by Jonathan Stempel in New York and Yasmeen Abutaleb and Sarah McBride in San Francisco; Editing by Matthew Lewis and Leslie Adler)

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DOJ money laundering probe of Deutsche Bank includes Kushner transactions: report

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The U.S. Department of Justice (DOJ) is conducting a criminal investigation of possible money laundering violations by Deutsche Bank, and the New York Times is reporting that the probe will include taking a look at some 2016 transactions involving Kushner Cos. — the business owned by the family of Senior White House Advisor Jared Kushner, President Donald Trump’s son-in-law.

In banking, reports of possibly suspicious activity are known as “suspicious activity reports,” and the DOJ is investigating why Deutsche Bank prepared such alerts for activity involving Kushner Cos. but did not file them. A key figure in the DOJ’s investigation is whistleblower Tammy McFadden, who helped prepare suspicious activity reports for Kushner Cos.-related transactions. McFadden is a former compliance officer for Deutsche Bank.

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2020 Election

Joe Biden promises to answer questions about his son’s overseas business dealings — after he’s elected

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Joe Biden refused to answer questions about his son's overseas business dealings.

The Democratic presidential frontrunner has been criticized for conducting diplomatic work as vice president in countries were his son, Hunter Biden, was engaged in business, but he refused at two campaign stops Monday to take questions about the controversy, reported ABC News.

Instead, his campaign promised that Biden would issue an executive order "on his first day in office" to "address conflicts of interest of any kind."

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US Justice Dept. tells court migrant children in federal concentration camps don’t need soap or toothbrushes

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The Trump administration's Justice Dept. lawyers say migrant children detained in federal concentration camps do not need soap or toothbrushes despite a settlement agreement that requires the U.S. Government to keep them in "safe and sanitary" facilities. The DOJ also argues that the children, detained in the Southern border camps, can continue to sleep on cold concrete floors in overcrowded cells without being in violation of the agreement.

The DOJ made the argument Tuesday before a three-judge panel of the Ninth Circuit, Courthouse News reports, noting the judges appeared "incredulous" with the government's claims.

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