A wannabe venture capitalist who made a “bogus offer” to buy Richard Branson’s satellite company is being sued by the Securities and Exchange Commission (SEC).
Matthew Brown, from Dallas-Fort Worth, owner of investment managing firm Matthew Brown Companies LLC, submitted a fake picture of a bank account in March 2023 that said he had $182 million while trying to purchase Virgin Orbit, a now-defunct company that launched small satellites into orbit, according to the SEC lawsuit.
In reality, his account had a balance of less than $1, prosecutors say.
The lawsuit says Brown sent an “unsolicited” LinkedIn message to Virgin Orbit CEO Dan Hart in March 2023 claiming he could “write” the $200m purchase.
That same day, the lawsuit says Brown sent another LinkedIn message to Virgin Orbit’s Vice President of Investor Relations, who he later emailed the apparent fraudulent bank account screenshot.
The potential deal was leaked to the media and caused Virgin Orbit stock rise by 33.1 percent, the SEC says. Soon afterward, Brown was invited on the business network CNBC to discuss the deal.
The network described him as an outside adviser to President Joe Biden’s administration on energy and defense.
“Brown claimed that he had previously invested hundreds of millions of dollars of his ‘personal capital,’ primarily in space companies,” the civil lawsuit, filed Monday, reads.
While on CNBC, Brown “falsely portrayed himself as an experienced venture capitalist with investments ‘in over 13 space companies’ and made false and misleading statements and omissions to the investing public concerning the legitimacy of his bogus $200 million offer,” the SEC suit reads.
Brown then attempted to convince Virgin Orbit to commit to a “break-up fee” should the deal not close, which the company did not agree to. Ultimately, no movement was ever made on the deal, the suit states.
The SEC is demanding the case be taken to a civil trial by jury.
Virgin Orbit, founded in 2017, permanently ceased operations in May 2023 after filing for Chapter 11 bankruptcy. Afterward, they sold all assets to four winning bidders.
Branson, billionaire founder of the satellite firm, is also co-founder of the Virgin Group, which controls more than 400 companies including Virgin Records and Virgin Atlantic.
According to his LinkedIn, Brown is a shareholder and senior advisor for Partager, an aerospace venture capital firm. He is also listed as General Partner, Senior Executive Partner for Energent, LP, a climate-focused investment management company.
In a statement on behalf of Brown and his company, a spokesperson told The Independent the SEC lawsuit is filled with “egregious errors, fabrications...and biased allegations that undeniably favor the culprit, Virgin Orbit’s Management.”
“In 2023, we were approached by a representative of Virgin Orbit to invest. We engaged in commercial conversations, and during our evaluations, a non-binding letter of intent was produced by Virgin Orbit. However, during our due diligence, we decided not to invest.”
The spokesperson added that Brown and his company “will not settle until we are vindicated by the rule of law”.
