US SEC sues over alleged fake bailout of Richard Branson's Virgin Orbit

By Jonathan Stempel

(Reuters) – A Texas man was sued by the U.S. Securities and Exchange Commission on Monday for his alleged fraudulent $200 million bid to save Virgin Orbit, billionaire Richard Branson's satellite launch services company, today now gone.

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 fake offer to buy Virgin Orbit stock on March 19, 2023, when the company was on the verge 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 even though it contained less than $1, and demanded that Virgin Orbit pay a $1 fee. “break” of 3% if his investment did so. not close.

Virgin Orbit's stock price rose 33% after the offering but fell after its collapse, according to the complaint filed in federal court in Fort Worth, Texas. The SEC is seeking a civil penalty, a securities offering ban and other remedies.

Brown could not immediately be reached for comment. The SEC believes he lives in the Dallas-Fort Worth area. A Dallas address listed for him in court documents and public records contained an unlisted number.

Virgin Orbit, which was once worth $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 financing at long term following a failed launch three months earlier.

The company was spun off from Branson's space tourism company, Virgin Galactic, in 2017.

Virgin Orbit had ended all contact with Brown on March 25, 2023, two days after telling CNBC that it was in “final discussions” about a bailout because it found issues with his credibility, the company said. time three people close to the talks.

In interviews with Reuters in early April 2023, Brown rejected accusations of deception.

“I absolutely had the money 100%,” he said.

The case is SEC v. Brown, US District Court, Northern District of Texas, No. 24-00558.

(Reporting by Jonathan Stempel in New York; editing by Matthew Lewis)