Snowflake Lawsuit reminded me that in the year 1996 when I started my career in building enterprise application for Oracle, Informix CEO, Phillip White went to jail. I remember the case as it later triggered the SOX law. Informix’s 1996 financial statements were inaccurate. The SEC charged that White had inappropriately included revenue from contracts where side letters existed (secret agreements that enable customers to cancel contracts and receive their money back) and engaged in barter transactions with computer manufacturers where reciprocal purchases of hardware for software were made.
Now, the former CEO, Frank Slootman may face the same type of issues. According to the register:
The class action suit, launched by law firm Robbins LLP on behalf of individual Suzanne Flannery, alleges that during the "Class Period" Snowflake "systematically oversold capacity to customers, which created a misleading appearance of the demand for Snowflake's products and services."
The legal document also claims Snowflake gave customers discounts leading up to its IPO, which it alleges "temporarily boosted sales" even though this would not be sustainable thereafter. The move, or so it claims, led to later "platform efficiency adjustments" that reduced client consumption, in turn allowing customers to "roll over a material amount of unused credits" thereby reducing future sales.
I am interested in watching this case to see what is the result.
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