It sounds like Cleveland Cavaliers owner Dan Gilbert is in some hot water.
The 59-year-old businessman is being sued for alleged insider trading.
“A pension fund in Detroit is suing Cleveland Cavaliers owner Dan Gilbert and Rocket Companies in a Delaware court, claiming he had insider information when he sold the fund $500 million in Rocket Companies stock,” wrote Sean McDonnell of Cleveland.com.
“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.”
Gilbert, of course, is the founder of Rock Ventures.
“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 told Cleveland.com.
The details of the lawsuit are very interesting. It sounds like Gilbert is going to have some work to do if he wants to clear his name.
“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,” McDonnell wrote.
“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.”
Gilbert became the majority owner of the Cavs back in 2005. Since then, the organization has won one championship. It came in 2016, ending a decades-long Cleveland sports nightmare.