Larry Ellison on stage at Oracle OpenWorld in September 2013, a year before he gave up the chief executive title. Credit: Oracle PR / Steve Walker / CC BY 2.0 via Wikimedia Commons Larry Ellison has cancelled a trading plan that would have let him sell up to 50 million Oracle shares by 24 October, a day after the plan was disclosed and with no stock sold under it. The instrument is a Rule 10b5-1 plan, an American safe harbour with no European counterpart, because EU market abuse rules bar managers from dealing in the 30 calendar days before results instead. Larry Ellison has cancelled the plan that would have let him sell up to 50 million Oracle shares, a day after it was disclosed, Bloomberg reported. “No Oracle stock was sold under that plan, and he has no other plans to sell any of his Oracle stock,” the company said.
The plan was adopted on 22 June and would have run to 24 October. The shares were worth about $8.75B then and about $7.5B now, after a 16% fall. Oracle described it as a 10b5-1 plan in its statement. Ellison controls about 40% of the company and is its executive chair and chief technology officer.
The timing was the problem. Oracle reported shrinking gross margins on Thursday, its shares fell 1.7% on Friday, and the same week it raised the cost of its job cuts to $2.8B. A Rule 10b5-1 plan is a piece of American market plumbing with no European equivalent. An executive who adopts one while not holding inside information can let trades execute later on a fixed schedule, including in periods when selling at their own discretion would draw questions.
The rule dates from 2000, and the SEC tightened what has to be disclosed about these plans in 2022. Europe closes the window instead. Under the Market Abuse Regulation, a person discharging managerial responsibilities may not deal in the company’s shares during the 30 calendar days before an interim or year-end report. There is no adopt-in-advance exemption from that.
Europe also discloses different things. It publishes transactions rather than intentions, within three working days of each deal, once EUR 5,000 has been reached in a calendar year. A plan that never traded would have left no trace at all. None of which suggests Ellison did anything improper.
No shares were sold, and the plan was disclosed exactly as American rules require, which is the only reason anybody knew about it. But the two regimes would have produced different weeks. Europe would never have published a plan for the market to read, and would not have let one run through the results of a company sitting one notch above junk.
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