CLEVELAND, Ohio – A pension fund in Detroit is suing Cleveland Cavaliers owner Dan Gilbert and Rocket Companiesin a Delaware court, claiming he had insider information when he sold the fund $500 million in Rocket Companies stock.
The sale was made in March to cover a philanthropic pledge, but the Police & Fire Retirement System in the City of Detroit claims Gilbert knew the stock’s value would drop soon after he sold it, according to the lawsuit.
Rock Holdings, Rocket Companies’ parent company which is headquartered in Detroit, issued a statement calling the civil suit “frivolous.”
“The claim that Dan Gilbert, the company’s founder and chairman, acted using information not available to the public is false and preposterous,” Rock Holdings spokesman Aaron Emerson said in an emailed statement to cleveland.com.
The suit was filed on Nov. 27 and has only been partially unsealed. Parts of the lawsuit released by the court to cleveland.com late Tuesday are redacted, including details of the pension fund’s version of events.
Rocket had predicted “blockbuster” growth in early 2021, but in May reported lower expectations that caused the stock price to fall, according to the lawsuit.
The suit claims Gilbert would have been aware of Rocket’s results in real-time, and that those results were discussed at a March 10 company meeting, more than two weeks before he sold the stock to the pension fund.
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