Shareholders of online mortgage company Rocket Cos. Inc. allege in a derivative suit that board members made numerous misleading statements about the business’ profitability despite knowing loan demand was declining and that its CEO exploited the nonpublic information in an insider trading scheme.
Rocket shareholder Michele Rayner-Altenbernd filed the complaint in Michigan federal court Monday over actions she alleged took place from at least Feb. 9, 2021, to May 5, 2021. The complaint alleges Rocket’s executives misled investors during the class period about the growth rate of its loan volume.
Rocket issues mortgages through a direct-to-consumer segment, known as its “retail” business, and a partner network, which uses referrals from mortgage brokers or third parties to acquire customers.
“Rocket’s total loan volume, as well as the loan volume in each of the company’s channels, had been declining for months since its peak in November 2020,” the complaint says.
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