In the first ever insider-trading claim litigated to trial in the Delaware Chancery Court, S&C prevailed for defendant Rock Holdings Inc. (RHI), the majority shareholder of one of the country’s largest mortgage originators, Rocket Companies Inc. On June 2, Chancellor Kathaleen St. J. McCormick handed S&C’s client a complete victory, rejecting plaintiffs’ claims for $203 million in damages.
S&C’s trial team was co-led by Sharon Nelles, Head of S&C’s Litigation Group, and Jeff Scott and Julia Malkina, Co-Heads of the Firm’s Securities Litigation Practice, who were named runner-up “Litigators of the Week” by The American Lawyer’s Litigation Daily.
During the three-day trial, the court heard testimony from seven fact witnesses and four experts on whether RHI’s sale of $500 million of Rocket stock in March 2021 was motivated by material non-public information, as plaintiffs alleged. In entering judgment for RHI, the court concluded that the testimony of RHI’s witnesses that the sale was not motivated by any such information “rang true” and was consistent with the contemporaneous documentary evidence that S&C had presented.
In related litigation, S&C convinced a federal district court last September not to certify two shareholder classes against RHI and Rocket, halting a securities fraud and insider-trading class action and slashing potential damages from the hundreds of millions to a few hundred thousand.
In addition to Sharon Nelles, Jeff Scott and Julia Malkina, S&C’s trial team included Marc De Leeuw, Michael Tomaino, Adam Brebner, Jacob Cohen, Samantha Briggs and Sarah Walker.