Court Rules Ellison Must Donate $100M to Charity

PokeyPenguin writes "As part of a settlement for insider trading allegations, a California judge has ordered that Larry Ellison donate $100 million to charity. CNet reports, 'The charity payments are an unusual way to settle such a case. Typically, settlement payments would go directly to the company, in this case Oracle. "But with Mr. Ellison owning a quarter of Oracle's stock, much of such a direct payment, in effect, would have gone to him."'"

In Other News: Ellison to Borrow Page From T-Rex

http://qwantz.com/index.pl?comic=667 [qwantz.com]

At press time, charity unreachable

Representatives from Ellison's selected charity - the little-known 'Human Fund' - were unavailable for comment.

No no no. The Bill & Melinda Gates Foundation

Ellison's lawyers filed an appeal under the 8th Amendment when it was revealed that Ellison would have to give the $100m to the Bill and Melinda Gates Foundation.

$17 Billion Dollars?

So the settlement was for 0.6% of his personal worth? Or bearly equivalent to a speeding ticket to a guy on $30,000 and he gets 5 years to pay it and no criminal record?

That's justice right there.

The Slashdot School of Law has failed you

1.) Only $100 million?

That's because no California court has ever awarded punitive damages in a derivative suit. Derivative suits, like this one, are about equity - not punishment.

2.) No criminal record?

Derivative suits are civil, not criminal.

Re:$17 Billion Dollars?

You want the real justice?

The people who lost out on this -- the shareholders who's stock lost extra value because he devalued their stock unfairly -- get nothing other than a mildly warm and fuzzy feeling that a company that they own some very small part of gave a sizable charitable donation somewhere.

The lawyers, on the other hand, get $24 million in cash money.

Re:$17 Billion Dollars?

I believe that with lawyers being the only ones who are really "remedied" in a class-action suit, it's almost not worth it to pursue them any more. While you may end up with a judgement against the offending party, you, a member of the class that was harmed, often get nothing. This could be a real problem, as class-action suits can be an effective tool for keeping people like Ellison in line. But then, if I get nothing out of it save to contribute to some greedy law firm's bottom line (in a siginificant way, mind you), why bother?

Great Solution

Why not just exclude his stock from the distribution of the settlement. That way the people he screwed could still benefit from this settlement.

Re:Great Solution

"A rising tide lifts all boats".

Favorite Charity.

Mr. Ellison's favorite charity: LINUX !!!!!

In other news

Me Ellison recently announced a $400M Dividend to be paid to shareholders

No wrongdoing?

From TFA:

Ellison offered in September to settle the case with $100 million in charitable donations and without admitting wrongdoing.

I'm really puzzled about this. Can someone explain to me, how you can pay yourself out of a wrongdoing?

To - you have either done nothing wrong, and you are free, or you have done something wrong and have to pay for it. Maybe I'm just naiive, but how can it be "nothing wrong" and paying back money?

See the Nixon pardon

how can it be "nothing wrong" and paying back money?

He admits nothing, but other people believe he did something wrong. As Gerald Ford said when he granted Nixon's pardon: "I am compelled to conclude that many months and perhaps more years will have to pass before Richard Nixon could obtain a fair trial by jury", and "To procrastinate, to agonize, and to wait for a more favorable turn of events that may never come or more compelling external pressures that may as well be wrong as right, is itself a decision of sorts"

.
For someone like Ellison, paying $100 million is nothing compared to waiting years for a trial, even if he were considered "not guilty" in the end.

Judgement Doesn't Make Sense to Me

The judgement doesn't make sense to me.

Typically, if someone does something bad to someone, the person doing the bad has to compensate the harmed person.

So if Ellison did something bad to the shareholders, he should pay the shareholders.

The fact that Ellison is a shareholder too doesn't matter -- all it means is, in the big scheme of things Ellison did something bad to the minority shareholders.

So Ellison could just as easily compensate only the minority shareholders -- but only as much as he hurt them.

It doesn't make sense for the judge to say, "Oh my! This case is so complex, let's just have Larry flush some money down the toilet or give it to charity, and we'll call it even."

$100 million or $100 million of Oracle software?

Not the same thing at all, though it doesn't stop the likes of Bill Gates mixing up the two. Seriously though if Ellison has to stump up the cash, he should strategically give it to open source projects where it would be the most benefit to Oracle.

Re:$100 million or $100 million of Oracle software

$100 million of Oracle software

That's what, licenses for a cluster of 2 machines with 4 CPUs each?

here's a little high school math problem for you

L.E. owns 25% of a company; this means that 25% of every payment to the company will therefore, in effect, go to L.E. The other 75% of the company's owners are supposed to receive $100m a penalty for wrongdoing by L.E. How much money must L.E. pay to the company so that the other 75% of the owners receive their $100m?

Apparently, the court found this little problem too hard to solve.

Re:here's a little high school math problem for yo

Math is hard.

Re:Tax Break

Won't he get a tax break therefore saving money in the long run?

Why don't you donate all your money to charity & save money using this
ruse?

No Tax Break

Ellison won't get a tax break. Although the payment is being made to a charity, it is not a charitable contribution. He is receiving legal consideration [thefreedictionary.com] for the payment -- i.e., he is settling and discharing a debt. It would similar to the situation where you bought a used car from the charity, and paid them money in exchange. Your payment would not be a charitable contribution

More precisely, the charity is a third party beneficiary [thefreedictionary.com] of a contract between the plaintiff(s) and Ellison to settle the case. It would be more like a case where "Seller" sells a car to you but, feeling charitable, writes the contract so you pay the money to the charity. In that case, if anyone got a deduction it would be "Seller" and not you.

Re:why not pay the shareholders?

well the long-term investors - those who were damaged at the time of illicit trading and have sustained a drop in shareholder wealth - are compensated with the recapitalization of the company

Re:JDJ Had This News 6 Weeks Ago

From TFA: ...the terms of which were approved on Tuesday by a California judge. Of course, Tuesday being November 22nd, the day this article was run. So, if you were to RTFA, you would find that this lists the newest developments in this case, not the stuff from six weeks ago.

Basic math and stupid decision

The logic here is strange and the share holders defrauded by the judge. If the goal is to make ellison 100 million poorer then this is simple:
x-0.25*x = 100 million
x = 133 million
So ellison should pay 133 million, he'll get 25% back in the book value of his stocks, and on paper be out 100 million.

On the otherhand if the idea is that oracle was defrauded 100 million, well then it's simple. He should give 100 million to oracle, regardless of his percent ownership since any injury he caused oracle came out of his pocket book too!.

Stupid decision.

At least the lawyers are happy...

From TFA, at first the judge didn't approve the settlement because the Oracle company would have to pay $24 million in legal fees. It was only when Ellison agreed to pay an extra $22 million to the lawyers that the settlement was approved.

From the article: "This provision makes an excellent settlement even better," Joseph Tabacco, the attorney who brought the case, said in a statement. Wow, who would have guessed it, a lawyer is happy to get $22 million!?

Re:If the judge really wanted to penalize him...

So to punish Ellison for devaluing Oracle share prices unfairly through insider trading, thus causing financial loss for Oracle share holders, you suggest financing an Oracle competitor. Where would the justice be for the people hurt in this, the Oracle share holders?!