Case 1:24-cv-00449-UNA Document 1 Filed 04/10/24 Page 1 of 78 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No.
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`JURY TRIAL DEMANDED
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`ARIF HUDDA, derivatively on behalf of
`VROOM, INC.,
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`Plaintiff,
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`vs.
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`PAUL J. HENNESSY, DAVID K. JONES,
`ROBERT J. MYLOD, JR., SCOTT A.
`DAHNKE, MICHAEL FARELLO, LAURA W.
`LANG, LAURA G. O’SHAUGHNESSY,
`FREDERICK O. TERRELL, and ADAM
`VALKIN
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`VROOM, INC.,
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`Defendants,
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`and
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`Nominal Defendant.
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`VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT
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`INTRODUCTION
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`Plaintiff Arif Hudda (“Plaintiff”), by Plaintiff’s undersigned attorneys, derivatively and on
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`behalf of Nominal Defendant Vroom, Inc. (“Vroom” or the “Company”), files this Verified
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`Shareholder Derivative Complaint against Paul J. Hennessy (“Hennessy”), David K. Jones
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`(“Jones”), Robert J. Mylod, Jr. (“Mylod”), Scott A. Dahnke (“Dahnke”), Michael Farello
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`(“Farello”), Laura W. Lang (“Lang”), Laura G. O’Shaughnessy (“O’Shaughnessy”), Frederick O.
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`Terrell (“Terrell”), and Adam Valkin (“Valkin”) (collectively, the “Individual Defendants,” and
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`together with Vroom, the “Defendants”) for breaches of their fiduciary duties as directors and/or
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`officers of Vroom, unjust enrichment, gross mismanagement, abuse of control, waste of corporate
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`assets, and against Defendants Mylod, Dahnke, Farello, Lang, O’Shaughnessy, Terrell, and Valkin
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`Case 1:24-cv-00449-UNA Document 1 Filed 04/10/24 Page 2 of 78 PageID #: 2
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`for contribution under Section 11(f) of the Securities Act of 1933 (the “Securities Act”) and against
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`Defendants Hennessy and Jones for contribution under Section 11(f) of the Securities Act and
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`Sections 10(b) and 21D of the Securities Exchange Act of 1934 (the “Exchange Act”). As for
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`Plaintiff’s complaint against the Individual Defendants, Plaintiff alleges the following based upon
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`personal knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as to all
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`other matters, based upon, inter alia, the investigation conducted by and through Plaintiff’s
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`attorneys, which included, among other things, a review of the Defendants’ public documents,
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`conference calls and announcements made by Defendants, United States Securities and Exchange
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`Commission (“SEC”) filings, wire and press releases published by and regarding Vroom, legal
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`filings, news reports, securities analysts’ reports and advisories about the Company, and
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`information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary
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`support will exist for the allegations set forth herein after a reasonable opportunity for discovery.
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`NATURE OF THE ACTION
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`1.
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`This is a shareholder derivative action that seeks to remedy wrongdoing committed
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`by the Individual Defendants from June 9, 2020 through March 3, 2021, both dates inclusive (the
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`“Relevant Period”).
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`2.
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`Vroom is an online ecommerce platform that allows customers to buy and sell used
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`cars. Initially, the Company was organized into three reportable segments: ecommerce, Texas
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`Direct Auto Inc. (“TDA”) 1 , and Wholesale. The ecommerce reportable segment, which was
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`discontinued in January 2024, represented retail sales of used vehicles through the Company’s
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`ecommerce platform and fees earned on sales of value-added products associated with those
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`1 Vroom began in 2013 as an entity called “Auto America.” The next year, in 2014, the Company
`rebranded to Vroom and shifted its business model to a technological platform. In December 2015,
`Vroom acquired TDA.
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`2
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`vehicles sales. The TDA reportable segment represents retail sales of used vehicles from TDA and
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`fees earned on sales of value-added products associated with those vehicles sales. The Wholesale
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`reportable segment represents sales of used vehicles through wholesale auctions.
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`3.
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`Due to the COVID-19 pandemic, demand for Vroom used cars dropped
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`significantly. As a result of this slowdown, Vroom significantly reduced its inventory and
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`furloughed approximately one-third of its workforce. When used car demand rebounded, Vroom
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`repeatedly said to investors that it was well-positioned to take advantage of this exceptionally high
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`demand for online used car purchases.
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`4.
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`Vroom became a public company through an initial public offering on June 9, 2020
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`(the “IPO”). On that day, Vroom filed a prospectus in connection the IPO with the SEC on Form
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`424B4 (the “IPO Prospectus”), which incorporated and formed part of the registration statement
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`for the offering (the “IPO Registration Statement,” and collectively with the IPO Prospectus, the
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`“IPO Offering Materials”). Through the IPO, Vroom sold 24,437,500 shares of common stock for
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`$22.00 per share, generating net proceeds of approximately $504 million.
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`5.
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`Vroom’s IPO Offering Materials stated that the Company was “currently building
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`[its] inventory to take advantage of [its] position and value proposition in the used automotive
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`market” and was positioned to take advantage of “enhanced opportunities arising from greater
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`consumer acceptance of [its] business model as a result of the COVID-19 disruptions.” The IPO
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`Offering Materials further stated that, in April 2020, the Company “began to acquire new inventory
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`from both auctions and consumers, with a primary focus on high-demand models that [it]
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`believe[d] w[ould] convert at target margins” and that the Company “intend[ed] to strategically
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`build [its] inventory levels in the near term to return to and ultimately exceed pre-COVID-19
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`levels.”
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`6.
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`The IPO Offering Materials also stated how Vroom’s business had “grown
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`significantly as [it had] scaled [its] operations‚” and that this “growth [was] not attributable to a
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`single innovation or breakthrough” but was instead due to “multiple strategies that serve as points”
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`on the Company’s “Growth Flywheel,” shown below:
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`7.
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`Vroom represented to investors in the IPO Offering Materials that “[s]ales
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`conversion drives revenue growth and is an output of the acceleration of every point on the
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`growth flywheel.”2
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`8.
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`The Individual Defendants also emphasized certain alleged advantages of Vroom’s
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`business model, including the outsourcing of critical functions of its business, which the Company
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`called a “asset-light” business model. The Company claimed that this strategy reduced both risk
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`and capital investment, disfavoring the need for ownership of assets and instead relied heavily on
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`contracts with third-party service providers. These third-party service providers would assist in
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`facilitating functions that would usually be controlled in-house.
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`2 All emphasis is added unless otherwise noted.
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`9.
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`To this end, the Company outsourced, inter alia, its “Customer Experience”
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`function, the section on the Company’s Growth Flywheel that operated Vroom’s primary call
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`center. The Customer Experience function was integral to Vroom’s operation as it was responsible
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`for nearly all interactions between Vroom and prospective customers. In other words, the Customer
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`Experience function was tasked with turning callers into customers.
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`10.
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`Nevertheless, Vroom outsourced the Customer Experience function to multi-
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`billionaire Dan Gilbert’s Rock Connections LLC (‘Rock Connections”), pursuant to an agreement
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`signed by Defendant Hennessy (the “2020 Customer Experience Agreement”). Dan Gilbert was a
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`high-profile Vroom investor.
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`11.
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`The 2020 Customer Experience Agreement provided the Individual Defendants
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`with unfettered access to Rock Connections, allowing the Individual Defendants to monitor the
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`customer service being provided by Rock Connections to Vroom’s customers.
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`12.
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`Specifically, the 2020 Customer Experience Agreement between Vroom and Rock
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`Connections, among other things: (1) required Rock Connections to provide all customer service
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`pursuant to Vroom’s policies and procedures; (2) required Rock Connections to “enter and save
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`all required information” in extreme detail into Vroom’s customer relationship management
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`(“CRM”) system, thereby making it accessible to Vroom’s senior executives and management; (3)
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`allowed the Company to control Rock Connections’ staffing and training of Rock Connections’
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`staff; and (4) allowed Vroom’s senior executives and management total access to oversee the
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`customer support provided to prospective Vroom customers, including monitoring capabilities for
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`voice and data with or without Rock Connections’ knowledge, allowing Vroom personnel to visit
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`Rock Connections’ facility, providing weekly reports to Vroom management, and requiring
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`weekly meetings between representatives of Rock Connections and Vroom. In other words, the
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`Individual Defendants enjoyed unfettered access to Rock Connections and, because of this
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`extensive access, were well aware of the Customer Experience being provided by Vroom through
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`Rock Connections.
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`13.
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`During the Relevant Period, the Individual Defendants represented that the sections
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`on Vroom’s Growth Flywheel were powering increased sales by emphasizing the Company’s
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`“[e]normous inventory selection,” “[e]xceptional customer support, and ability to offer “an
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`exceptional ecommerce experience for [its] customers.” The Individual Defendants further
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`represented to investors that, pursuant to the Company’s Growth Flywheel, “customer experience”
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`was “fundamental to the growth of [its] business” and that the Company has a “deep[]
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`commit[ment] to creating an exceptional experience for [its] customers.”
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`14.
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`Analysts and investors had knowledge of the Company’s asset-light strategy and
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`outsourcing of critical functions, and they monitored Vroom’s third-party relationships given their
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`importance to Vroom’s Growth Flywheel and ability to convert customers and increase sales.
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`15.
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`Relying upon the Individual Defendants foregoing representations regarding rising
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`sales figures, among other things, investors shot Vroom’s stock price upward from its June 2020
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`IPO price of $22.00 per share to $73.87 per share on September 1, 2020.
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`16.
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`Just one week later, and only a few weeks from the end of the third quarter of 2020,
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`the Individual Defendants took advantage of Vroom’s lofty share price by announcing a follow-
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`on stock offering to be held in September 2020 (the “September 2020 SPO”). In that same
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`announcement, the Company updated investors on Vroom’s operational and financial results,
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`raising the Company’s third quarter financial guidance, and told investors that Vroom was
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`performing “better than expected.”
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`17.
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`On September 8, 2020, the Company filed with the SEC a registration statement on
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`Form S-1 for the September 2020 SPO (the “SPO Registration Statement”). On September 11,
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`2021, the Company filed the prospectus for the September 2020 SPO (the “SPO Prospectus”)
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`(together with the SPO Registration Statement, the “SPO Offering Materials”).
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`18.
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`The SPO Offering Materials made many of the same misrepresentations to
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`investors that were made mere months earlier in the IPO Offering Materials. These statements
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`represented that Vroom’s growth was due to the sections on Vroom’s Growth Flywheel, such as
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`the Company’s “[e]normous inventory selection” and “[e]xceptional customer support.” The SPO
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`Offering Materials further represented that Vroom’s purported ability to offer a superior Customer
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`Experience as a key factor from “traditional auto dealers and the peer-to-peer market.”
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`19.
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`Like the IPO Offering Materials, the SPO Offering Materials discussed Vroom’s
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`Customer Experience in detail, representing that Vroom “partnered with a leading customer
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`experience management provider to operate [its] primary call center” which enabled it “to
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`centralize [its] contact center services, ensure consistency in customer interactions, increase
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`conversion and maximize operating efficiencies.” From these positive statements about Vroom’s
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`business model in the SPO Offering Materials, in the September 2020 SPO, Vroom sold 10.8
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`million shares of its common stock at $54.50 per share for almost $590 million in gross offering
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`proceeds.
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`20.
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`Unfortunately for the Company and for investors, the Individual Defendants’
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`representations regarding Vroom’s Customer Experience section on the Growth Flywheel were
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`not grounded in reality.
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`21.
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`In truth, Vroom’s Customer Experience business model was a failure—preventing
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`the Company from capitalizing on a large online used car sales market and also forcing the
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`Company to sell off excess inventory it had retained at extremely low prices. Making matter worse,
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`the Company’s Customer Experience section had been deteriorating since as early as January
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`2020—more than five months before Vroom’s IPO and over eight months before the September
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`2020 SPO.
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`22.
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`Indeed, the Better Business Bureau of Greater Houston and South Texas (the
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`“BBB”), which oversees the main area of the Company’s operations, determined that “[b]eginning
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`in January 2020, BBB began receiving complaints and customer reviews [about Vroom] which
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`exhibited several different patterns” including complaints from Vroom customers asserting that:
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`(a) “the vehicle[] they purchased from photos was not the vehicle they received;” (b) “[w]hen the
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`vehicle was received it had either body damage, interior was dirty, discolored or damaged or all of
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`the above;” (c) damaged “cars were delivered at night, so damages were not noticed at delivery;”
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`and (d) “cars were left in a parking lot or driveway at night with the keys left in them.”
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`Additionally, according to the BBO, “[c]onsumers also stated they were having customer service
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`and communication issues when trying to reach out to the company to address their concerns,”
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`“were not receiving the necessary paperwork to get their car registered,” were experiencing
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`“delayed delivery in receiving their car,” and/or were experiencing “issues concerning their trade-
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`in.” The BBB further reported that “[s]ince January [2020], the pattern of [Vroom] complaints has
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`not trended down but has actually increased,” with “new patterns of complaints” in June 2020
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`focused on “warranty issues, deceptive Carfax issues and/or wrecked cars being sold.”
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`23.
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`The immense number of complaints, negative customer reviews, and various
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`customer service issues being reported to the BBB caused them to initiate proceedings to revoke
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`Vroom’s BBB accreditation.
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`24.
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`On September 2, 2020, right before the Company announced the September 2020
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`SPO, the BBB’s board of directors revoked Vroom’s accreditation due to the Company’s failures
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`to adhere to and abide by BBB standards and informed Vroom of its action. However, the
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`September 2020 SPO Offering Materials did not report the BBB proceedings to revoke the
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`Company’s accreditation or the BBB board’s revocation decision. Instead, the Individual
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`Defendants concealed the truth, only discussing the BBB in a generic statement regarding
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`consumer complaints posted on “consumer platforms such as the Better Business Bureau” “could”
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`hurt consumer confidence in Vroom, “irrespective of the [ ] validity” of any such complaints.
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`Currently, Vroom remains unaccredited, and the BBB gave an “F” rating to Vroom, the lowest
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`letter rating the BBO can give a company.
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`25.
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`In all, the Company’s poor Customer Experience situation presented a huge
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`undisclosed barrier to converting prospective customers into used car purchasers on the Growth
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`Flywheel, which in turn, materially negatively impacted Vroom’s business and overall operations.
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`For these reasons, and others, during the Relevant Period, the Individual Defendants’
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`representations regarding Customer Experience and the importance of Vroom’s increased
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`inventory levels were false and misleading at the time they were made and at all relevant times
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`thereafter.
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`26.
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`The truth began to emerge on November 11, 2020 when Vroom announced its third
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`quarter 2020 financial results, disclosing that the Company anticipated much higher losses in the
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`fourth quarter of 2020, with adjusted earnings before interest, taxes, depreciation, and amortization
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`(“EBITDA”) losses estimated to rise from $36 million in the third quarter of 2020 to at least $44
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`million with the possibility of even reaching $52 million.
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`27.
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`On this news, the Company’s stock price fell 13%, from a closing price of $40.80
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`per share on November 11, 2020 to a closing price of $35.49 per share on November 12, 2020.
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`28.
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`The truth would not fully emerge until approximately four months later, on March
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`3, 2021, when the Company announced its fourth quarter and full year financial results, revealing
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`operational issues and financial results that were far worse than those previously disclosed. For
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`the fourth quarter of 2020, Vroom suffered a net loss of $60.7 million, a 41.9% year-over-year
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`increase. In addition, the Company reported a $55.9 million adjusted EBITDA loss during the
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`quarter, which was $3.9 million above the range provided by the Individual Defendants. The press
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`release further revealed that the Company had achieved just $1,821 in total gross profit per
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`ecommerce unit, which was $229 less than the range included in prior Vroom financial guidance.
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`Moreover, the Company received just $878 gross profit per vehicle, marking a 13% decline year-
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`over- year.
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`29.
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`On this news, Vroom’s stock price fell 28%, from a closing price of $43.90 per
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`share on March 3, 2021 to a closing price of $31.61 per share on March 4, 2021.
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`30.
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`During the Relevant Period, the Individual Defendants breached their fiduciary
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`duties by personally making and/or causing Vroom to make to the investing public a series of
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`materially false and misleading statements regarding the business, operations, and prospects.
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`Specifically, the Individual Defendants willfully or recklessly made and/or caused Vroom to make
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`false and misleading statements that failed to disclose, inter alia, that: (1) Vroom’s sales and
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`support personnel could not effectively keep up with inventory growth, leading to increasing
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`concerns regarding Vroom’s profits, the value of its current inventory, and its ability to achieve
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`positive cash flows; (2) Vroom’s diminishing sales and support staff produced poor Customer
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`Experience and cost Vroom sales opportunities; (3) as a result, the Company needed to invest tens
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`of millions of dollars into improving Vroom’s sales support and logistics networks which
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`materially impaired Vroom’s short-term profitability; (4) as a further result of the foregoing, the
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`Company was positioned to experience rising losses and negative cash flows, even in light of a
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`thriving online used car market; (5) Vroom was never “well positioned to navigate the challenges
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`presented by the COVID-19 crisis and take advantage of shifting consumer buying and selling
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`patterns in favor of ecommerce”; and (6) Vroom lacked effective and adequate internal controls at
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`all relevant times. As a result of the foregoing, the Company’s public statements were materially
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`false and misleading and/or lacked a reasonable basis at all relevant times.
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`31.
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`The Individual Defendants also breached their fiduciary duties by failing to correct
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`and/or caused the Company to fail to correct these false and misleading statements and omissions
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`of material fact to the investing public.
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`32.
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`Additionally, in breach of their fiduciary duties, the Individual Defendants willfully
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`or recklessly caused the Company to fail to maintain adequate internal controls while one of the
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`Individual Defendants engaged in improper insider sales, netting personal proceeds totaling
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`$4,460,927.
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`33.
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`The Individual Defendants also breached their fiduciary duties by failing to correct
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`and/or causing the Company to fail to correct these false and misleading statements and omissions
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`of material fact.
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`34.
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`In light of the Individual Defendants’ misconduct—which has subjected the
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`Company, its Chief Executive Officer (“CEO”), its Chief Financial Officer (“CFO”), and six
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`current and/or former Company directors to a consolidated federal securities fraud class action
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`lawsuit pending in the United States District Court for the Southern District of New York (the
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`“Securities Class Action”) which has further subjected the Company to the need to undertake
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`internal investigations, the need to implement adequate internal controls, losses from the waste of
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`corporate assets, and losses due to the unjust enrichment of Individual Defendants who were
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`improperly overcompensated by the Company and/or who benefitted from the wrongdoing alleged
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`herein—the Company will have to expend many millions of dollars.
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`35.
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`The Company has been substantially damaged as a result of the Individual
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`Defendants’ knowing or highly reckless breaches of fiduciary duty and other misconduct.
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`36.
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`In light of the breaches of fiduciary duty engaged in by the Individual Defendants,
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`most of whom are the Company’s current directors, of the collective engagement in fraud and
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`misconduct by the Company’s directors, of the substantial likelihood of the directors’ liability in
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`this derivative action, of the CEO’s and CFO’s liability in the Securities Class Action, and of their
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`not being disinterested and/or independent directors, a majority of the Company’s Board of
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`Directors (the “Board”) cannot consider a demand to commence litigation against themselves on
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`behalf of the Company with the requisite level of disinterestedness and independence.
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`JURISDICTION AND VENUE
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`37.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because
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`Plaintiff’s claims raise a federal question under Section 11(f) of the Securities Act (15 U.S.C. §
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`77k(f)(1)), Section 10(b) of the Exchange Act, 15 U.S.C. §§ 78j(b)), Section 21D of the Exchange
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`Act (15 U.S.C. § 78u-4(f)), and raise a federal question pertaining to the claims made in the
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`Securities Class Action based on violations of the Securities Act and the Exchange Act.
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`38.
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`This Court has supplemental jurisdiction over Plaintiff’s state law claims pursuant
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`to 28 U.S.C. § 1367(a).
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`39.
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`This derivative action is not a collusive action to confer jurisdiction on a court of
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`the United States that it would not otherwise have.
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`40.
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`Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1401 because a
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`substantial portion of the transactions and wrongs complained of herein occurred in this District,
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`and the Defendants have received substantial compensation in this District by engaging in
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`numerous activities that have had an effect in this District.
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`PARTIES
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`Plaintiff
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`41.
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`Plaintiff Arif Hudda is a current shareholder of Vroom. Plaintiff has continuously
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`held Vroom common stock since he purchased it on June 9, 2020.
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`Nominal Defendant Vroom
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`42.
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`Nominal Defendant Vroom is a Delaware corporation with its principal executive
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`offices located at 3600 W Sam Houston Pkwy S, Floor 4, Houston, Texas, 77042. Vroom’s
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`common stock trades on the NASDAQ under the ticker symbol “VRM.”
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`Defendant Hennessy
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`43.
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`Defendant Hennessy served as a director and the Company’s CEO from 2016 until
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`May 2022. According to the Company’s proxy statement filed on Schedule 14A with the SEC on
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`April 29, 2021 (the “2021 Proxy Statement”), as of March 31, 2021, Defendant Hennessy
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`beneficially owned 1,598,559 shares of the Company’s common stock. Given that the price per
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`share of the Company’s stock at the close of trading on March 31, 2021 was $38.99, Defendant
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`Hennessy beneficially owned approximately $62 million worth of Vroom stock as of that date.
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`44.
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`For the fiscal year ended December 31, 2020 (the “2020 Fiscal Year”), Defendant
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`Hennessy received $4,315,077 in total compensation from the Company. This included $468,077
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`in salary and $3,847,000 in stock awards. For the fiscal year ended December 31, 2021 (the “2021
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`Fiscal Year”), Defendant Hennessy received $18,328,140 in total compensation from the
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`Company. This included $500,000 in salary and $17,828,140 in stock awards.
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`45.
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`The Company’s 2021 Proxy Statement states the following about Defendant
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`Hennessy:
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`Paul J. Hennessy has served as our Chief Executive Officer and as a member of our
`Board of Directors since June 2016. Mr. Hennessy has over 20 years of global
`ecommerce leadership experience, previously serving in several leadership roles
`for Booking Holdings, Inc. (“Booking Holdings”), a world leader in online travel.
`At Booking Holdings, he most recently served as Chief Executive Officer of
`Priceline.com, a leading online travel agency for finding discount rates for travel-
`related purchases, from April 2015 to June 2016, and as Chief Marketing Officer
`of Booking.com, a leading online service for booking accommodation reservations,
`from November 2011 to March 2015. Mr. Hennessy also currently serves on the
`board of directors and the audit committee and compensation committee of
`Shutterstock Inc. Mr. Hennessy holds a Bachelor of Science in Marketing
`Management from Dominican College and a Master of Business Administration
`from Long Island University.
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`Mr. Hennessy was selected to serve on our Board of Directors based on his deep
`experience and the perspective he brings as our Chief Executive Officer, as well as
`his extensive prior ecommerce leadership experience, driving growth strategies and
`optimizing operations and marketing for profitability.
`
`Defendant Jones
`
`46.
`
`Defendant Jones served as the Company’s CFO from November 2018 until
`
`September 2021. According to the 2021 Proxy Statement, as of March 31, 2021, Defendant Jones
`
`beneficially owned 90,000 shares of the Company’s common stock. Given that the price per share
`
`of the Company’s stock at the close of trading on March 31, 2021 was $38.99, Defendant Jones
`
`beneficially owned approximately $3 million worth of Vroom stock as of that date.
`
`47.
`
`For the 2020 Fiscal Year, Defendant Jones received $869,313 in total compensation
`
`from the Company. This included $484,615 in salary and $384,698 in stock awards. For the 2021
`
`Fiscal Year, Defendant Jones received $925,429 in total compensation from the Company. This
`
`included $455,769 in salary and $431,198 in stock awards.
`
`14
`
`

`

`Case 1:24-cv-00449-UNA Document 1 Filed 04/10/24 Page 15 of 78 PageID #: 15
`
`48.
`
`During the Relevant Period, while the Company’s stock price was artificially
`
`inflated and before the scheme was exposed, Defendant Jones made the following sales of
`
`Company stock:
`
`Date
`12/7/2020
`12/18/2020
`1/7/2021
`2/8/2021
`2/9/2021
`2/10/2021
`
`Proceeds
`$349,230
`$600,000
`$1,045,700
`$1,215,675
`$755,295
`$495,027
`
`Number of Shares
`10,000
`15,000
`25,000
`25,000
`15,105
`9,895
`
`Avg. Price/Share
`34.92
`40.00
`41.83
`48.63
`50.00
`50.03
`
`
`Thus, in total, before the fraud was exposed, he sold 100,000 shares of Company stock on inside
`
`information, for which he received approximately $4,460,927 in proceeds. His insider sales, made
`
`with knowledge of material nonpublic information before the material misstatements and
`
`omissions were exposed, demonstrate his motive in facilitating and participating in the scheme.
`
`49.
`
`The Company’s 2021 Proxy Statement states the following about Defendant Jones:
`
`David K. Jones has served as our Chief Financial Officer since November 2018.
`Prior to joining Vroom, he served as Executive Vice President and Chief Financial
`Officer of Iconix Brand Group, Inc., a global brand management company, from
`July 2015 to November 2018. From May 2011 to July 2015, Mr. Jones served as
`Executive Vice President and Chief Financial Officer of Penske Automotive
`Group, an international transportation services company operating automotive and
`commercial truck dealerships. Mr. Jones joined Penske Automotive Group in 2003
`and served in various senior management roles through May 2011. He began his
`career in public accounting at Andersen LLP and remained there for over a decade.
`Mr. Jones holds a Bachelor of Business Administration in Accounting from Seton
`Hall University.
`
`Defendant Mylod
`
`50.
`
`Defendant Mylod has served as a Company director since 2015. He also serves as
`
`the Chairperson of the Board, the chair of the Audit Committee, and a member of the
`
`Compensation Committee. According to the Company’s proxy statement filed on Schedule 14A
`
`with the SEC on January 2, 2024 (the “2024 Proxy Statement”), as of December 19, 2023,
`
`15
`
`

`

`Case 1:24-cv-00449-UNA Document 1 Filed 04/10/24 Page 16 of 78 PageID #: 16
`
`Defendant Mylod beneficially owned 716,139 owned shares of the Company’s common stock.
`
`Given that the price per share of the Company’s stock at the close of trading on December 19,
`
`2023 was $61.60, Defendant Mylod beneficially owned approximately $45.3 worth of Vroom
`
`stock as of that date.
`
`51.
`
`For the 2020 Fiscal Year, Defendant Mylod received $29,423 in total compensation
`
`from the Company, consisting entirely of $29,423 in fees earned or paid in cash. For the 2021
`
`Fiscal Year, Defendant Mylod received $52,500 in total compensation from the Company,
`
`consisting entirely of $52,500 in fees earned or paid in cash.
`
`52.
`
`The Company’s 2021 Proxy Statement states the following about Defendant
`
`Mylod:
`
`Robert J. Mylod, Jr. has served as a member of our Board of Directors since
`September 2015. Mr. Mylod is the Managing Partner of Annox Capital
`Management, a private investment firm that he founded in 2013. Previously, Mr.
`Mylod served as Head of Worldwide Strategy & Planning and Vice Chair for
`Bookings Holdings, Inc., an online travel services provider, from January 2009 to
`March 2011 and as its Chief Financial Officer and Vice Chair from November 2000
`to January 2009. He currently serves as the Chair of the board of directors and a
`member of the compensation committee of Booking Holdings, Inc. Mr. Mylod also
`currently serves as a member of the board of directors and of the audit committee
`of Redfin Corporation, an online real estate company. He also is a member of the
`board of directors and of the audit and compensation committees of Dropbox, Inc.,
`a cloud-based collaboration and data storage company, and a number of private
`companies. Mr. Mylod holds a Bachelor of Arts in English from the University of
`Michigan and a Master of Business Administration from the University of Chicago
`Booth School of Business.
`
`We believe that Mr. Mylod’s experience as a venture capital investor and a senior
`finance executive, including having served as the head of worldwide strategy and
`planning, chief financial officer and vice chairman of a large publicly traded online
`services provider, qualifies him to serve on our Board of Directors.
`
`Defendant Dahnke
`
`53.
`
`Defendant Dahnke served as a Company director from 2015 until 2022. He also
`
`served as the chair of the Nominating and Corporate Governance Committee. According to the
`
`16
`
`

`

`Case 1:24-cv-00449-UNA Document 1 Filed 04/10/24 Page 17 of 78 PageID #: 17
`
`2021 Proxy Statement, as of March 31, 2021, Defendant Dahnke beneficially owned 19,741,015
`
`shares of the Company’s common stock, constituting 14.5% of the outstanding stock of the
`
`Company. Given that the price per share of the Company’s stock at the close of trad