LiDAR cloud moves off of orthomap when scaling/rotating

Prior to performing the "shift layer by coordinate transformation", my LiDAR cloud has the same origin point as my orthomap and DEM. I enter in the scale factor and rotation angle but when the action is completed, my LiDAR cloud moves thousands of feet away from the common origin point. My ortho, DEM and GCP's are brought in first to set the location parameters, then I input the cloud. At that time, only a minor shift is needed to fix the cloud to the corresponding ortho location. I am not reversing northing/easting etc.