The Securities and Exchange Commission is suing a wannabe venture investor who made a “bogus” offer to buy Richard Branson’s satellite company.
According to the SEC lawsuit, Matthew Brown, of Dallas Fort Worth and owner of investment management firm Matthew Brown Companies LLC submitted a false picture of a bank in March 2023, which said he had $182,000,000, while trying to buy Virgin Orbit – a now-defunct satellite launcher.
Prosecutors claim that in reality, the balance on his account was less than $1.
The lawsuit claims that Brown sent a “unsolicited message” on LinkedIn to Virgin Orbit‘s CEO Dan Hart, in March 2023, claiming he was able to “write” the purchase of $200m.
The lawsuit claims that Brown sent a second LinkedIn message to Virgin Orbit’s Vice President of Investor Relations on the same day. He then emailed him the screenshot of the allegedly fraudulent bank account.
The SEC claims that the potential deal was leaked in the media, which caused Virgin Orbit’s stock to rise by 33.1%. Brown was then invited to appear on the business network CNBC and discuss the deal.
The network described him a as an outside advisor to President Joe Biden’s administration on energy, defense and other issues.
The civil lawsuit, filed on Monday, states that “Brown claimed he had invested hundreds of millions in his ‘personal money’, primarily into space companies.”
The SEC lawsuit states that Brown “falsely presented himself as an experienced Venture Capitalist with investments in ‘over 13 space companies'” and “made false and misleading statements and made omissions regarding the legitimacy of his bogus 200 million offer to the investing public.”
Brown then tried to convince Virgin Orbit that it would pay a “breakup fee” if the deal did not close. The company refused. The suit claims that no progress was made on the deal.
The SEC demands that the case be brought to a civil jury trial.
Virgin Orbit was founded in 2017 and filed for Chapter 11 bankruptcy in May 2023. Then, they sold their assets to four successful bidders.
Branson, the billionaire founder of Virgin Satellite, is also the co-founder of Virgin Group. The Virgin Group controls over 400 companies, including Virgin Records and Virgin Atlantic.
According to his LinkedIn profile, Brown is an investor and senior advisor at Partager, a venture capital firm that specializes in aerospace. He is also listed on his LinkedIn as a General Partner, Senior executive partner for Energent, LP, a company that focuses on climate-focused investments.
A spokesperson for Brown and his company told The independent that the SEC lawsuit was filled with “egregious mistakes, fabrications…and bias allegations that undeniably favour Virgin Orbit’s Management.”
“In 2023, a Virgin Orbit representative approached us to invest. Virgin Orbit sent us a non-binding Letter of Intent during our evaluations. During our due diligence we decided to not invest.”
The spokesperson said that Brown and his firm “will not settle” until they are vindicated under the law.