20 CASES TO WATCH GOODWIN lated revenues. On September 14, 2017, Oracle issued a press release announcing that results for its first fiscal quarter ended August 31, 2017 were “up 51% to $1.5 bil- lion.” On September 18, 2017, Oracle filed a Form 10-Q attributing its cloud revenue growth to “increased. . . investments in and focus on the development, market- ing and sale of our cloud-based applications, platform and infrastructure technologies.” The company made similar statements promoting the cloud business at an October 5, 2017 OpenWorld Financial Analyst confer- ence, and on December 14, 2017, Oracle issued a press release stating that cloud revenues were “up 44% to $1.5 billion.” Thereafter, on March 19, 2018, the company disclosed that cloud revenue growth had stagnated and forecasted significantly slower sales growth for its cloud business relative to its competitors. Following the announcement, Oracle’s stock price declined by nearly 9.5%, representing the Company’s largest single-day stock drop in more than five years. Investors filed a federal securities class action against Oracle and its officers, asserting claims under Sections 10(b) and 20(a) and Rule 10b-5. Plaintiffs allege that de- fendants made misrepresentations regarding revenue growth within Oracle’s cloud segment. Plaintiffs further allege that Gartner, Inc., “a leading research and advi- sory company. . . observed that Oracle had to rely on coercive practices because its cloud-based offering is a ‘bare-bones minimum viable product.’” The complaint includes allegations that Oracle’s cloud revenues were driven by unsustainable and coercive practices, includ- ing: (1) audits of customers’ use of non-cloud software licenses and “levying expensive penalties against those customers”; (2) “decreasing customer support . . . in an effort to drive customers . . . into cloud-based systems”; and (3) “strong-arming customers by threatening to dramatically raise the cost of legacy database licenses if the customers choose another cloud provider.” In re Facebook, Inc. Securities Litigation, Case No. 5:18-cv-01725 (N.D. Cal) - Data Access of Disclosure Facebook, Inc., (“Facebook”) operates a social network- ing website. Between 2016 and early 2018, Facebook warned in its SEC filings that “[s]ecurity breaches and improper access to or disclosure of our data or user data, or other hacking and phishing attacks on our sys- tems, could harm our reputation and adversely affect our business.” During the same time, Facebook main- tained a data privacy policy, which stated that “Your trust is important to us, which is why we don’t share information we receive about you with others unless we have: received your permission; given you notice, such as by telling you about it in this policy; or removed your name and any other personally identifying information from it.” Thereafter, beginning in March 2018, media reports stated that a political consulting firm, Cambridge Analytica, gathered personal information of 50 million Facebook users from Facebook without permission or proper disclosures. Further reports of U.S. and foreign government investigations into the matter followed, and Facebook’s stock price declined. Investors filed securities class action lawsuits against Facebook and its officers, alleging that defendants made materially false and/or misleading claims about Facebook’s handling of user data in violation of Sections 10(b) and 20(a), and Rule 10b-5. A lead plaintiff was appointed on August 3, 2018, and a consolidated amended complaint was filed on October 15, 2018. Defendants moved to dismiss the consolidated amended complaint on December 14, 2018, arguing that plaintiffs have not adequately alleged any material- ly false misstatements or omissions, scienter, reliance, or loss causation. The motion to dismiss is scheduled to be heard in April 2019.