Oracle's Ellison accused of running executive fighting ring

SEC investigators discover bloodied C-level execs, options letters at 'Billionaires' Bare-knuckle Brawling Club'

SEC investigators claim to have broken up an underground fighting ring in which participants beat each other bloody. To add insult to injury, the victors then brokered business deals that skirted U.S. securities law and deprived the losers of valuable stock options.

The mastermind behind the Silicon Valley fight club is alleged to be eccentric billionaire and Oracle CEO Larry Ellison. SEC investigators got a break on the case when an entry-level intern noticed that the supplies manifest for the forthcoming OpenWorld included two industrial-sized drums of Bactine.

Investigators claim that Ellison coordinated a once-a-month night of blood sports using recruits from the upper ranks of Silicon Valley's executives and promising lucrative under-the-table deals to the winners. The losers had to cede some of their incentives packages.

While managers at some of the Valley's most recognizable names -- Apple, Xilinx, Hewlett-Packard -- steered clear of the fight club, others had found a crafty way to keep their company networking at the underground events.

CEO John Donahoe of eBay is alleged to have continued a practice that Meg Whitman pioneered: forcing executives of companies eBay acquired to engage in the CEO fight club on eBay's behalf.

"Why do you think eBay bought GSI Commerce?" a source said. "Michael Rubin has the bloodlust. He once tried to rip off Ben Fischman's earlobes with his teeth. Now that Donahoe's got Rubin in his stable of fighters, eBay's going to dominate the fight club."

Since the club's inception in 2005, eBay has gone on a corporate buying spree, spending at least $6 billion on more than 15 different companies. SEC investigators are working with local hospitals to determine how many of those companies' C-level executives were forced into the ring.

The fights had staffing ramifications beyond the squared circle, alleges a Silicon Valley insider who wished to remain anonymous.

"You thought Dirk Meyer was pushed out of AMD by the board?" said the insider. "Not true. That's his cover story. He's really training at a mountaintop dojo. He's determined to wipe the floor with Wenchi Chin by Q3. Literally."

Meyer was unavailable for comment.

In addition to determining who's in and who's out of the corner office, the CEO fight club can also determine where the smart money's going.

"We only wooed social commerce startups because eBay wanted them," said one venture capitalist. "You have no idea what desperate executives will agree to for a second round of financing."

The SEC is now investigating whether Oracle's acquisition of Pre-Paid Software from eServGlobal Limited is linked to a fight club bout in February 2010.

"It's the worst kind of insider deal," said SEC spokesperson Phin Abrazo. "Not only did Craig Halliday take it on the chin, so did Oracle's investors."