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The U.S. Securities and Exchange Commission (SEC) sued Matthew Brown, a Texas man, for allegedly making a fraudulent $200 million offer to save the now-defunct satellite launch company Virgin Orbit Holdings, Inc. (NASDAQ:VORBQ), previously owned by billionaire Richard Branson.
According to the SEC, Brown falsely claimed to be an experienced venture capitalist with investments in more than 13 space companies and fabricated a bank statement to support his bid.
The SEC’s complaint, filed in Fort Worth, Texas, federal court, accused Brown of presenting a doctored screenshot showing his company’s bank account holding $182.4 million when it contained less than $1.
Brown also demanded a 3% break-up fee if his investment did not close.
Following his offer on March 19, 2023, Virgin Orbit’s stock price surged by 33%, only to fall after the deal collapsed.
Brown and his firm, Matthew Brown Companies, are defendants in the case. Reuters noted the SEC seeks a civil fine, a ban on offering securities and other remedies.
The defendants have dismissed the SEC’s complaint as containing “egregious errors,” “fabrications” and “biased allegations” favoring Virgin Orbit management, Reuters added.
Once valued at $3.8 billion and serving the U.S. military, Virgin Orbit filed for Chapter 11 bankruptcy protection in April last year.
This move followed the company’s struggle to secure long-term funding after a failed launch three months earlier. Virgin Orbit was spun off from Branson’s space tourism venture Virgin Galactic Holdings Inc (NASDAQ:SPCE) in 2017.
Issues with Brown’s credibility led Virgin Orbit to terminate discussions with him on March 25, 2023, two days after he told CNBC he was in “final discussions” to rescue the company.
Three sources familiar with the talks confirmed the termination.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Viewimage on Shutterstock
