Jonathan Stempel
(Reuters) – The U.S. Securities and Exchange Commission on Monday sued a Texas man over his alleged fraudulent $200 million bid to save billionaire Richard Branson’s now-defunct satellite launch company Virgin Orbit.
The SEC said Matthew Brown falsely represented himself, including on CNBC, as an experienced venture capitalist with investments in “more than 13 space companies” when he made a fictitious offer to buy shares of Virgin Orbit on March 19, 2023. when the company was teetering on the brink of bankruptcy. .
According to the SEC, Brown fabricated a screenshot of his company’s bank account to show a “current” balance of $182,383,991, although it contained less than $1, and demanded that Virgin Orbit pay a 3% “split” fee if it the investment will be worth it. not close.
Virgin Orbit’s share price rose 33% after the offering but fell after it collapsed, according to the lawsuit filed in federal court in Fort Worth, Texas. The SEC is seeking a civil penalty, an injunction against the offering of securities and other remedies.
Brown could not immediately be reached for comment. The Securities and Exchange Commission believes he resides in the Dallas-Fort Worth area. The Dallas address listed for him in court documents and public records contained an unlisted number.
Virgin Orbit, which was once valued at $3.8 billion and counted the U.S. military among its largest customers, filed for Chapter 11 protection on April 4, 2023, after struggling to secure long-term financing after failed launch three months earlier.
The company was spun off from Branson’s space tourism company Virgin Galactic in 2017.
Virgin Orbit stopped contacting Brown on March 25, 2023, two days after he told CNBC he was in “final discussions” about the rescue after problems were found with its credibility, three people familiar with the talks said at the time.
In an interview with Reuters in early April 2023, Brown denied allegations of deception.
“I absolutely, 100% had the money,” he said.
The case is SEC v. Brown, U.S. District Court, Northern District of Texas, No. 24-00558.