SEC v. Matthew Brown; and Matthew Brown Companies, LLC, No. 4:24-cv-00558, Northern District of Texas (June 17, 2024) — Complaint

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

SECURITIES AND EXCHANGE COMMISSION,
   Plaintiff,
 v.
MATTHEW BROWN and
MATTHEW BROWN COMPANIES, LLC,

 Defendants.

         Civ. Action No. 4:24-cv-00558
    JURY TRIAL DEMANDED

COMPLAINT
The Securities and Exchange Commission (“SEC”) files this Complaint against Matthew
Brown (“Brown”)  and  Matthew  Brown  Companies,  LLC  (“Matthew  Brown  Companies”)
(together, “Defendants”), and alleges as follows:
I. SUMMARY
1. In March 2023, Defendants engaged in a fraudulent scheme to submit and publicly
tout a bogus offer to purchase $200 million of stock from Virgin Orbit Holdings, Inc. (“Virgin
Orbit”).
2. On March 19, 2023, Defendant Brown sent unsolicited messages to Virgin Orbit
executives offering to invest $200 million in Virgin Orbit, which at the time was teetering on the
brink of bankruptcy and seeking a funding lifeline. To convince Virgin Orbit that the offer was
legitimate,  Brown  made  false  and  misleading  statements  and  omissions  about  his  investment
experience  and  funds available  to  make  such  an  offer.  Brown  claimed that  he  had previously
invested hundreds of millions of dollars of his “personal capital,” primarily in space companies.
Most egregiously, Brown sent Virgin Orbit a fabricated screenshot of his company’s bank account

2

purporting to show a balance of over $182 million in the account, when in fact, the account held
less than $1 at the time.
3. Brown’s bogus offer leaked to the media shortly after he made it, and Virgin Orbit’s
stock price rose approximately 33.1%.
4. Thereafter,  on  March  23,  2023, Brown  appeared  on  CNBC,  where  he  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.
5. After appearing  on  CNBC, Brown  attempted  to  profit  from  his  misconduct  by
requesting that Virgin Orbit pay him a “break-up” fee if his proposed investment did not close.
But Virgin Orbit refused to agree to any such fee.
6. Brown  then failed  to  respond  to  Virgin  Orbit’s  due  diligence  inquiries  and,  of
course, never funded the offer.  When the market learned that Brown’s offer had collapsed, Virgin
Orbit’s stock price dropped, and the company filed for bankruptcy soon after.
7. By  engaging  in  the  acts  and  conduct  alleged  herein,  Defendants  violated  Section
10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. The
SEC seeks:  (i) permanent injunctive relief against both Defendants; (ii) an officer-and-director bar
against Brown; and (iii) a civil penalty against Brown.
II. JURISDICTION AND VENUE
8. The SEC brings this action pursuant to the authority conferred upon it by Sections
21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)].
9. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and
27 of the Exchange Act [15 U.S.C. §§ 78u(d), (e), and 78aa].

3

10. Defendants,   directly   or   indirectly, made   use   of   the   mails   or means   or
instrumentalities of interstate commerce, transportation, or communication, and/or of facilities of
a  national  securities  exchange  in  interstate  commerce,  in  connection  with  the  acts,  practices,
transactions, and courses of business alleged in this Complaint.
11. Venue  is  proper  in  this  District  pursuant  to  Section  27  of  the  Exchange  Act  [15
U.S.C. § 78aa]. One or both Defendants transact business in this District, and on information and
belief, one or both Defendants are found or are inhabitants of this District. In addition, certain acts,
practices, and/or transactions constituting violations of the securities laws alleged herein occurred
within this District.
III. DEFENDANTS
12. Defendant Matthew Brown is believed to reside in the Dallas-Fort Worth area. In
the SEC’s investigation that preceded the filing of this Complaint, Brown testified that he leased
an apartment in Dallas, Texas at or around the time of the relevant events in this case (i.e., March
2023),  and  claimed that  his  lease  expired  in  or  around  August  2023.  His  parents  reside  in  Fort
Worth, Texas, and on information and belief, Brown either is residing or has resided there. Public
records  list  various  addresses  in  or  around  Dallas  and  Fort  Worth  associated  with  Brown  since
2020.
13. Defendant  Matthew  Brown  Companies  is  a  Delaware  limited  liability  company
with its principal place of business in Fort Worth, Texas. Brown is the President, sole managing
member,  and  sole  employee  of  Matthew  Brown  Companies.  Its  sole  filing  with  the  Delaware
Secretary  of  State  is  a  Certificate  of  Formation  filed  in April  2020  that  lists   Brown  as  its  sole
member and his address in Fort Worth, Texas. This same Fort Worth address is listed as the mailing
address for Matthew Brown Companies on its bank account statements as recently as March 2023.
These bank account statements relate to a bank account in the name of Matthew Brown Companies

4

at a bank branch located in Fort Worth, Texas—the same bank account for which Brown sent a
fabricated  screenshot  to  Virgin  Orbit  on  March  19,  2023. Matthew  Brown  Companies  has  also
held itself out as a Texas venture capital firm via its website, www.matthewbrowncompanies.com.
IV. FACTS
A. Virgin Orbit
14. In 2017, Virgin Group spun off newly formed Virgin Orbit from Virgin Galactic
Holdings,  Inc.  (“Virgin  Galactic”).  Virgin  Galactic  primarily  offered  space  tourism  services,
while Virgin Orbit provided commercial satellite launch services.
15. After  the  spin-off,  Virgin  Orbit  began trading publicly  on  the  Nasdaq  under  the
Ticker Symbol: VORB.
1

16. Virgin  Orbit  carried  out  six  missions,  four  of  which  were  successful.  Its  last
mission, in January 2023, was not successful, as the launched rockets failed to reach orbit and the
commercial and defense satellites they were carrying fell into the ocean.
17. On March 15, 2023, CNBC reported that Virgin Orbit was furloughing nearly all
its employees and pausing operations for one week as it looked for a funding lifeline. Later that
day, Virgin Orbit filed a Form 8-K with the SEC, disclosing that it would immediately initiate a
company-wide  operational  pause  to  conserve  capital,  pursue  additional  funding,  and  explore
strategic opportunities.
18. After markets opened the next day, on March 16, 2023, Virgin Orbit’s stock price
fell from $1.01 per share to $0.71 per share.

1
 Virgin Orbit’s Ticker Symbol became VORBQ when it filed bankruptcy.

5

B. Defendants’ Bogus Offer and Misrepresentations and Omissions to Virgin Orbit.
19. On  March  19,  2023,  Brown  sent  an  unsolicited  message  via  LinkedIn  to  Virgin
Orbit’s CEO to discuss a possible “capital injection.” After the CEO responded, Brown wrote back
on March 19, 2023: “I have invested over $750mm of my personal capital, largely in this [space]
vertical, and largely in stealth mode.... I have the bandwidth to write the $200mm.” He further
emphasized: “I want to reiterate this [sic] my capital not...anyone else’s.”
20. Brown  had  never  invested  “over  $750mm”  of  his  personal  capital,  he  had  never
held  any  personal  investments  or  positions  in  any  space  companies,  and  he  did  not  have  the
bandwidth  to  invest  $200  million  of  his  own  capital  or  from  any  other  known  source  of  capital
accessible to him at the time. In fact, at or around the time of his statements to Virgin Orbit’s CEO,
Brown was self-employed and, as he later admitted under oath, his net worth was “negative”—
none of which he disclosed to Virgin Orbit in this message or in subsequent communications with
Virgin  Orbit.  Also,  by  representing  that  his  earlier investments  were  “largely  in  stealth  mode,”
Brown created the false and misleading impression that his alleged investment history was hidden
from public view, when, in fact, no such investment history existed.
21. Nonetheless, on  March  19,  2023,  the  same  day  as  his  LinkedIn  message,  Brown
sent an unsolicited email to Virgin Orbit’s Vice President (“VP”) of Investor Relations to set up a
call  regarding  “financing.”  After  exchanging  emails,  Brown,  on  behalf  of  himself  and  Matthew
Brown Companies, emailed the VP of Investor Relations on March 19, 2023: “I hope this can get
the ball rolling. I do not have access to my J.P. M brokerage acct but this should hopefully paint a
decent picture until we get further down the road.” Brown attached to his email a screenshot of a
bank  account  in  the  name  of  Matthew  Brown  Companies  purporting  to  show  a  “current”  and
“accessible” balance, as of March 19, 2023, of $182,383,991.26.

6

22. The screenshot attached to Brown’s March 19, 2023 email to Virgin Orbit’s VP of
Investor Relations was fabricated and contained materially false and misleading representations.
Specifically, as of March 19, 2023, the actual balance of the Matthew Brown Companies’ bank
account that  Brown  identified  to  support  his  offer  was  less  than  $1,  which  Defendants  never
disclosed to Virgin Orbit.
23. By falsely portraying his  experience  and  available  funding, Brown  was  able  to
engage Virgin Orbit in negotiations over his bogus offer. At the outset of these negotiations, Virgin
Orbit sent Brown a non-disclosure agreement (“NDA”) requiring each side to safeguard and not
disclose  any  confidential  information  exchanged  during  discussions  surrounding  Defendants’
proposed  investment.  Both  sides  executed  the  NDA  on  or  around  March  19  or  20,  2023. At
Defendants’ request, Virgin Orbit also prepared and sent Defendants a term sheet for the proposed
$200  million  investment  on  or  around  March  20,  2023. The  term  sheet  provided  for  Brown  to
receive  $200  million  of  Virgin  Orbit  preferred  stock,  convertible  to  common  stock  following
stockholder and regulatory approval, in exchange for Brown’s $200 million investment.
24. On  March  19  and  20,  2023,  Brown  had  additional  calls  and  emails  with
representatives  of  Virgin  Orbit  where  he  repeated  the  same  or  similar  false  and  misleading
statements and omissions discussed above. In emails on March 19 and 20, 2023 with Virgin Orbit’s
representatives,  Brown  also represented  that  he  had  a  law  degree  from  Southern  Methodist
University in Dallas, when in fact Brown had never graduated from college, let alone attended law
school.
25. Brown also sought to induce Virgin Orbit to expedite the transaction. For example,
on  March  20,  2023,  after  Virgin  Orbit  sent  Brown  and  his  lawyer  a  draft  term  sheet,  Brown
responded: “[i]n  the  interest  of  time,  let  us  both  work  together  outside  counsel  until  definitive

7

agreements. (aka let us get the [term sheet] executed and then we can run the race – I would prefer
to do the [term sheet] tonight or within the next 24hr.).”
26. On  March  22,  2023,  Virgin  Orbit  filed  a  Form  8-K  with  the  SEC  announcing  it
would  immediately  resume  operations  to  prepare  for  its  next  mission  while  it  sought  new
funding—a significant change from its March 15, 2023 Form 8-K announcing a company-wide
operational pause.    Although this announcement did not mention Brown or the term sheet, a couple
of  hours  later,  Reuters  reported  that  Virgin  Orbit  was  near  a  deal  to  raise  $200  million  from
Matthew Brown Companies, “according to a term sheet seen by Reuters.”
27. These public  reports  following the  bogus  offer—including  Virgin  Orbit’s  March
22, 2023 Form 8-K and the Reuters report published the same day—inflated Virgin Orbit’s stock
price.  Following Virgin Orbit’s Form 8-K filing and the publication of the Reuters article, Virgin
Orbit’s stock price rose 33.1% on March 22, 2023, from $0.44 per share to $0.59 per share. Trading
volume for VORB shares also increased on March 22, 2023 in comparison to the day before.
28. Brown knew, or was severely reckless in not knowing, that his deceptive conduct,
misstatements, and omissions about his background and available funds would create the false and
misleading impression that Defendants’ $200 million offer was legitimate and would trigger public
announcements that could impact Virgin Orbit’s stock price.
C. Defendants’ False and Misleading Statements and Omissions on CNBC.
29. Despite  having  executed  an  NDA  with  Virgin  Orbit  only  days  earlier,  Brown
appeared  on  CNBC  on  March  23,  2023,  where  he  participated  in  a  live, nationally  televised
interview  that  was  broadcast  to  the  general  public.  During  that  interview,  Brown confirmed  the
reported $200 million investment offer that he and his company proposed to Virgin Orbit. Brown
further represented that he and his company were in “final discussions” with Virgin Orbit and that
they “fully plan” on closing a transaction “in the next 24 hours.” Although he suggested that he

8

could  not  get  into  the  details  of  the  discussions,  he  confirmed  his  proposed  investment  would
“make [Virgin Orbit] cash flow positive” and that he would “basically be the owner” of Virgin
Orbit as a result of the transaction.
30. During  his  CNBC  interview,  Brown  also  portrayed himself  and  Matthew  Brown
Companies  as  successful,  experienced  venture  capitalists  within  the  space  industry.  He  even
claimed that he and his company held investments “in over 13 space companies.”
31. In reality, Brown and his company had never held any investments or positions in
any space companies, much less investments in “over 13 space companies.” He also lacked the
capital and resources needed to close on the $200 million investment, had no experience making
investments of the magnitude purportedly offered to Virgin Orbit, and later admitted in testimony
that his net worth at the time was “negative”—none of which he disclosed in his CNBC interview
or in any subsequent disclosures to investors.
32. Brown knew, or was severely reckless in not knowing, that his misstatements and
omissions during the CNBC interview about his background and purported offer were false, would
create the false and misleading impression that Defendants’ $200 million offer was legitimate, and
could impact Virgin Orbit’s stock price.
D. Virgin Orbit Files Bankruptcy After Negotiations With Defendants Collapse.
33. Shortly  after  the  CNBC  interview,  Brown  attempted—unsuccessfully—to  profit
from  his  deceptive  conduct  (and his false  and  misleading  statements  and  omissions)  through  a
proposed “break-up” fee. Specifically, on March 24, 2023, Brown wrote to Virgin Orbit,  lamenting
that he “wish[ed] [his] name was never made public,” and that he had supposedly “been on the
phone nonstop since the leak” of his offer (i.e., the Reuters article). Thus, before signing a term
sheet that required him to disclose confidential information to Virgin Orbit, Brown proposed that

9

Virgin Orbit agree to “a break up fee of 3%” to be paid to him if the investment transaction did
not close.
34. Virgin Orbit refused Brown’s break-up fee proposal and responded on March 24,
2023: “[i]f you have funds and can place them in a verifiable escrow account with the appropriate
agreement and can send to us [then] we can discuss.” Brown responded by again asking for Virgin
Orbit to agree to a break-up fee, to which Virgin Orbit again reiterated that Brown needed to first
place the necessary funds in escrow and respond to Virgin Orbit’s basic due diligence requests.
35. Because Brown  continued  to  refuse  to  escrow  funds  (which  he  did  not  have)  or
respond to Virgin Orbit’s basic due diligence requests, negotiations quickly broke down. By March
24, 2023, Brown conceded to Virgin Orbit that “[i]t looks like the deal will not consummate....”
On March 25, 2023, Virgin Orbit’s counsel sent Brown a cease-and-desist letter, demanding that
he stop disclosing confidential information and communications in violation of the NDA.
36. On March 27, 2023—after the markets closed—CNBC reported that Virgin Orbit
had failed to obtain new funding, noting that Brown’s offer had collapsed. When markets reopened
the next day, on March 28, 2023, Virgin Orbit’s stock price dropped approximately 28.4%, from
approximately  $0.54 per  share  to  $0.38 per  share.  A  week  later,  on  April  4,  2023,  Virgin  Orbit
filed for bankruptcy, and on May 2, 2023, it was delisted from Nasdaq.
V. CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 10b-5(a)-(c) thereunder [17 C.F.R. §§ 240.10b-5(a)-(c)]
(Against Defendants)
37. The SEC re-alleges and incorporates paragraphs 1-36 above by reference as if fully
set forth hereunder.

10

38. By engaging in the acts and conduct alleged herein, and as alleged in paragraphs
19-36 above, Defendants, directly or indirectly, singly or in concert with others, in connection with
the  purchase  or  sale  of  securities,  by  the use  of  any  means  or  instrumentality  of  interstate
commerce, or of the mails or of any facility of any national securities exchange:
• employed a device, scheme, or artifice to defraud; and/or
• made  untrue  statements  of  material  facts,  or  omitted  to  state  material  facts
necessary   in   order   to   make   the   statements   made,   in   the light   of   the
circumstances under which they were made, not misleading; and/or
• engaged  in  acts,  practices,  or  courses  of  business  which  operated,  or  would
operate, as a fraud or deceit upon any person.
39. With regard to the violations of Section 10(b) of the Exchange Act and Rule 10b-
5(a),  (b),  and  (c) thereunder, Defendants acted with scienter and engaged in the referenced acts
knowingly and/or with severe recklessness.
40. By  reason  of  the  foregoing,  Defendants  have violated,  and  unless  enjoined  will
continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(a)-(c)
thereunder [17 C.F.R. § 240.10b-5(a)-(c)].
VI. PRAYER FOR RELIEF
41. WHEREFORE, the SEC respectfully requests that this Court enter a Final
Judgment:
• Permanently restraining and enjoining Defendants from violating, directly
or indirectly, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;
• Permanently  restraining  and  enjoining  Brown  from  directly  or  indirectly,
including but not limited to, through any entity owned or controlled by him, participating in the

11

issuance, purchase, offer, or sale of any security; provided, however, that such injunction shall not
prevent him from purchasing or selling securities for his own personal account;
• Permanently barring Brown, pursuant to Section 21(d)(2) of the Exchange
Act,  from  acting  or  serving  as  an  officer  or  director  of  any  issuer  that  has  a  class  of  securities
registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file
reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];
• Ordering Brown to pay a civil penalty pursuant to Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)]; and
• Granting such other and further relief as this Court may deem appropriate,
just, equitable, and/or necessary.
VII. JURY DEMAND

42. The SEC demands trial by jury in this action on all issues so triable.
Dated:  June 17, 2024    Respectfully submitted,

/s/ Patrick Disbennett____________
Patrick Disbennett
Texas Bar No. 24094629
United States Securities and Exchange Commission
Fort Worth Regional Office
Burnett Plaza, Suite 1900
801 Cherry Street, Unit 18
Fort Worth, TX  76102
Telephone: (817) 266-9633 (Disbennett)
Facsimile: (817) 978-4927
[email protected]

ATTORNEY FOR PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION

UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF TEXAS 

FORT WORTH DIVISION 
 

SECURITIES AND EXCHANGE COMMISSION, 

   Plaintiff, 

 v. 

MATTHEW BROWN and 
MATTHEW BROWN COMPANIES, LLC, 
 

 Defendants.  
 

 

 
         
         Civ. Action No. 4:24-cv-00558 

    JURY TRIAL DEMANDED 

 

COMPLAINT 

The Securities and Exchange Commission (“SEC”) files this Complaint against Matthew 

Brown (“Brown”) and Matthew Brown Companies, LLC (“Matthew Brown Companies”) 

(together, “Defendants”), and alleges as follows: 

I. SUMMARY  

1. In March 2023, Defendants engaged in a fraudulent scheme to submit and publicly 

tout a bogus offer to purchase $200 million of stock from Virgin Orbit Holdings, Inc. (“Virgin 

Orbit”).  

2. On March 19, 2023, Defendant Brown sent unsolicited messages to Virgin Orbit 

executives offering to invest $200 million in Virgin Orbit, which at the time was teetering on the 

brink of bankruptcy and seeking a funding lifeline. To convince Virgin Orbit that the offer was 

legitimate, Brown made false and misleading statements and omissions about his investment 

experience and funds available to make such an offer. Brown claimed that he had previously 

invested hundreds of millions of dollars of his “personal capital,” primarily in space companies. 

Most egregiously, Brown sent Virgin Orbit a fabricated screenshot of his company’s bank account 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 1 of 11   PageID 1



2 
 

purporting to show a balance of over $182 million in the account, when in fact, the account held 

less than $1 at the time.  

3. Brown’s bogus offer leaked to the media shortly after he made it, and Virgin Orbit’s 

stock price rose approximately 33.1%. 

4. Thereafter, on March 23, 2023, Brown appeared on CNBC, where he 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. 

5. After appearing on CNBC, Brown attempted to profit from his misconduct by 

requesting that Virgin Orbit pay him a “break-up” fee if his proposed investment did not close. 

But Virgin Orbit refused to agree to any such fee.  

6. Brown then failed to respond to Virgin Orbit’s due diligence inquiries and, of 

course, never funded the offer.  When the market learned that Brown’s offer had collapsed, Virgin 

Orbit’s stock price dropped, and the company filed for bankruptcy soon after.      

7. By engaging in the acts and conduct alleged herein, Defendants violated Section 

10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. The 

SEC seeks: (i) permanent injunctive relief against both Defendants; (ii) an officer-and-director bar 

against Brown; and (iii) a civil penalty against Brown.  

II. JURISDICTION AND VENUE 

8. The SEC brings this action pursuant to the authority conferred upon it by Sections 

21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)]. 

9. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and 

27 of the Exchange Act [15 U.S.C. §§ 78u(d), (e), and 78aa]. 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 2 of 11   PageID 2



3 
 

10. Defendants, directly or indirectly, made use of the mails or means or 

instrumentalities of interstate commerce, transportation, or communication, and/or of facilities of 

a national securities exchange in interstate commerce, in connection with the acts, practices, 

transactions, and courses of business alleged in this Complaint. 

11. Venue is proper in this District pursuant to Section 27 of the Exchange Act [15 

U.S.C. § 78aa]. One or both Defendants transact business in this District, and on information and 

belief, one or both Defendants are found or are inhabitants of this District. In addition, certain acts, 

practices, and/or transactions constituting violations of the securities laws alleged herein occurred 

within this District.  

III. DEFENDANTS 

12. Defendant Matthew Brown is believed to reside in the Dallas-Fort Worth area. In 

the SEC’s investigation that preceded the filing of this Complaint, Brown testified that he leased 

an apartment in Dallas, Texas at or around the time of the relevant events in this case (i.e., March 

2023), and claimed that his lease expired in or around August 2023. His parents reside in Fort 

Worth, Texas, and on information and belief, Brown either is residing or has resided there. Public 

records list various addresses in or around Dallas and Fort Worth associated with Brown since 

2020.  

13. Defendant Matthew Brown Companies is a Delaware limited liability company 

with its principal place of business in Fort Worth, Texas. Brown is the President, sole managing 

member, and sole employee of Matthew Brown Companies. Its sole filing with the Delaware 

Secretary of State is a Certificate of Formation filed in April 2020 that lists Brown as its sole 

member and his address in Fort Worth, Texas. This same Fort Worth address is listed as the mailing 

address for Matthew Brown Companies on its bank account statements as recently as March 2023. 

These bank account statements relate to a bank account in the name of Matthew Brown Companies 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 3 of 11   PageID 3



4 
 

at a bank branch located in Fort Worth, Texas—the same bank account for which Brown sent a 

fabricated screenshot to Virgin Orbit on March 19, 2023. Matthew Brown Companies has also 

held itself out as a Texas venture capital firm via its website, www.matthewbrowncompanies.com.  

IV. FACTS 

A. Virgin Orbit 

14. In 2017, Virgin Group spun off newly formed Virgin Orbit from Virgin Galactic 

Holdings, Inc. (“Virgin Galactic”). Virgin Galactic primarily offered space tourism services, 

while Virgin Orbit provided commercial satellite launch services.  

15. After the spin-off, Virgin Orbit began trading publicly on the Nasdaq under the 

Ticker Symbol: VORB.1 

16. Virgin Orbit carried out six missions, four of which were successful. Its last 

mission, in January 2023, was not successful, as the launched rockets failed to reach orbit and the 

commercial and defense satellites they were carrying fell into the ocean.  

17. On March 15, 2023, CNBC reported that Virgin Orbit was furloughing nearly all 

its employees and pausing operations for one week as it looked for a funding lifeline. Later that 

day, Virgin Orbit filed a Form 8-K with the SEC, disclosing that it would immediately initiate a 

company-wide operational pause to conserve capital, pursue additional funding, and explore 

strategic opportunities.  

18. After markets opened the next day, on March 16, 2023, Virgin Orbit’s stock price 

fell from $1.01 per share to $0.71 per share.  

 
1 Virgin Orbit’s Ticker Symbol became VORBQ when it filed bankruptcy.  

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 4 of 11   PageID 4



5 
 

B. Defendants’ Bogus Offer and Misrepresentations and Omissions to Virgin Orbit.  

19. On March 19, 2023, Brown sent an unsolicited message via LinkedIn to Virgin 

Orbit’s CEO to discuss a possible “capital injection.” After the CEO responded, Brown wrote back 

on March 19, 2023: “I have invested over $750mm of my personal capital, largely in this [space] 

vertical, and largely in stealth mode…. I have the bandwidth to write the $200mm.” He further 

emphasized: “I want to reiterate this [sic] my capital not…anyone else’s.”   

20. Brown had never invested “over $750mm” of his personal capital, he had never 

held any personal investments or positions in any space companies, and he did not have the 

bandwidth to invest $200 million of his own capital or from any other known source of capital 

accessible to him at the time. In fact, at or around the time of his statements to Virgin Orbit’s CEO, 

Brown was self-employed and, as he later admitted under oath, his net worth was “negative”—

none of which he disclosed to Virgin Orbit in this message or in subsequent communications with 

Virgin Orbit. Also, by representing that his earlier investments were “largely in stealth mode,” 

Brown created the false and misleading impression that his alleged investment history was hidden 

from public view, when, in fact, no such investment history existed.  

21. Nonetheless, on March 19, 2023, the same day as his LinkedIn message, Brown 

sent an unsolicited email to Virgin Orbit’s Vice President (“VP”) of Investor Relations to set up a 

call regarding “financing.” After exchanging emails, Brown, on behalf of himself and Matthew 

Brown Companies, emailed the VP of Investor Relations on March 19, 2023: “I hope this can get 

the ball rolling. I do not have access to my J.P. M brokerage acct but this should hopefully paint a 

decent picture until we get further down the road.” Brown attached to his email a screenshot of a 

bank account in the name of Matthew Brown Companies purporting to show a “current” and 

“accessible” balance, as of March 19, 2023, of $182,383,991.26.      

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 5 of 11   PageID 5



6 
 

22. The screenshot attached to Brown’s March 19, 2023 email to Virgin Orbit’s VP of 

Investor Relations was fabricated and contained materially false and misleading representations. 

Specifically, as of March 19, 2023, the actual balance of the Matthew Brown Companies’ bank 

account that Brown identified to support his offer was less than $1, which Defendants never 

disclosed to Virgin Orbit.  

23. By falsely portraying his experience and available funding, Brown was able to 

engage Virgin Orbit in negotiations over his bogus offer. At the outset of these negotiations, Virgin 

Orbit sent Brown a non-disclosure agreement (“NDA”) requiring each side to safeguard and not 

disclose any confidential information exchanged during discussions surrounding Defendants’ 

proposed investment. Both sides executed the NDA on or around March 19 or 20, 2023. At 

Defendants’ request, Virgin Orbit also prepared and sent Defendants a term sheet for the proposed 

$200 million investment on or around March 20, 2023. The term sheet provided for Brown to 

receive $200 million of Virgin Orbit preferred stock, convertible to common stock following 

stockholder and regulatory approval, in exchange for Brown’s $200 million investment.  

24. On March 19 and 20, 2023, Brown had additional calls and emails with 

representatives of Virgin Orbit where he repeated the same or similar false and misleading 

statements and omissions discussed above. In emails on March 19 and 20, 2023 with Virgin Orbit’s 

representatives, Brown also represented that he had a law degree from Southern Methodist 

University in Dallas, when in fact Brown had never graduated from college, let alone attended law 

school.   

25. Brown also sought to induce Virgin Orbit to expedite the transaction. For example, 

on March 20, 2023, after Virgin Orbit sent Brown and his lawyer a draft term sheet, Brown 

responded: “[i]n the interest of time, let us both work together outside counsel until definitive 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 6 of 11   PageID 6



7 
 

agreements. (aka let us get the [term sheet] executed and then we can run the race – I would prefer 

to do the [term sheet] tonight or within the next 24hr.).”   

26. On March 22, 2023, Virgin Orbit filed a Form 8-K with the SEC announcing it 

would immediately resume operations to prepare for its next mission while it sought new 

funding—a significant change from its March 15, 2023 Form 8-K announcing a company-wide 

operational pause. Although this announcement did not mention Brown or the term sheet, a couple 

of hours later, Reuters reported that Virgin Orbit was near a deal to raise $200 million from 

Matthew Brown Companies, “according to a term sheet seen by Reuters.”  

27. These public reports following the bogus offer—including Virgin Orbit’s March 

22, 2023 Form 8-K and the Reuters report published the same day—inflated Virgin Orbit’s stock 

price.  Following Virgin Orbit’s Form 8-K filing and the publication of the Reuters article, Virgin 

Orbit’s stock price rose 33.1% on March 22, 2023, from $0.44 per share to $0.59 per share. Trading 

volume for VORB shares also increased on March 22, 2023 in comparison to the day before.     

28. Brown knew, or was severely reckless in not knowing, that his deceptive conduct, 

misstatements, and omissions about his background and available funds would create the false and 

misleading impression that Defendants’ $200 million offer was legitimate and would trigger public 

announcements that could impact Virgin Orbit’s stock price. 

C. Defendants’ False and Misleading Statements and Omissions on CNBC.  

29. Despite having executed an NDA with Virgin Orbit only days earlier, Brown 

appeared on CNBC on March 23, 2023, where he participated in a live, nationally televised 

interview that was broadcast to the general public. During that interview, Brown confirmed the 

reported $200 million investment offer that he and his company proposed to Virgin Orbit. Brown 

further represented that he and his company were in “final discussions” with Virgin Orbit and that 

they “fully plan” on closing a transaction “in the next 24 hours.” Although he suggested that he 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 7 of 11   PageID 7



8 
 

could not get into the details of the discussions, he confirmed his proposed investment would 

“make [Virgin Orbit] cash flow positive” and that he would “basically be the owner” of Virgin 

Orbit as a result of the transaction.  

30. During his CNBC interview, Brown also portrayed himself and Matthew Brown 

Companies as successful, experienced venture capitalists within the space industry. He even 

claimed that he and his company held investments “in over 13 space companies.”  

31. In reality, Brown and his company had never held any investments or positions in 

any space companies, much less investments in “over 13 space companies.” He also lacked the 

capital and resources needed to close on the $200 million investment, had no experience making 

investments of the magnitude purportedly offered to Virgin Orbit, and later admitted in testimony 

that his net worth at the time was “negative”—none of which he disclosed in his CNBC interview 

or in any subsequent disclosures to investors.  

32. Brown knew, or was severely reckless in not knowing, that his misstatements and 

omissions during the CNBC interview about his background and purported offer were false, would 

create the false and misleading impression that Defendants’ $200 million offer was legitimate, and 

could impact Virgin Orbit’s stock price. 

D. Virgin Orbit Files Bankruptcy After Negotiations With Defendants Collapse.  

33. Shortly after the CNBC interview, Brown attempted—unsuccessfully—to profit 

from his deceptive conduct (and his false and misleading statements and omissions) through a 

proposed “break-up” fee. Specifically, on March 24, 2023, Brown wrote to Virgin Orbit, lamenting 

that he “wish[ed] [his] name was never made public,” and that he had supposedly “been on the 

phone nonstop since the leak” of his offer (i.e., the Reuters article). Thus, before signing a term 

sheet that required him to disclose confidential information to Virgin Orbit, Brown proposed that 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 8 of 11   PageID 8



9 
 

Virgin Orbit agree to “a break up fee of 3%” to be paid to him if the investment transaction did 

not close.  

34. Virgin Orbit refused Brown’s break-up fee proposal and responded on March 24, 

2023: “[i]f you have funds and can place them in a verifiable escrow account with the appropriate 

agreement and can send to us [then] we can discuss.” Brown responded by again asking for Virgin 

Orbit to agree to a break-up fee, to which Virgin Orbit again reiterated that Brown needed to first 

place the necessary funds in escrow and respond to Virgin Orbit’s basic due diligence requests.     

35. Because Brown continued to refuse to escrow funds (which he did not have) or 

respond to Virgin Orbit’s basic due diligence requests, negotiations quickly broke down. By March 

24, 2023, Brown conceded to Virgin Orbit that “[i]t looks like the deal will not consummate….” 

On March 25, 2023, Virgin Orbit’s counsel sent Brown a cease-and-desist letter, demanding that 

he stop disclosing confidential information and communications in violation of the NDA.   

36. On March 27, 2023—after the markets closed—CNBC reported that Virgin Orbit 

had failed to obtain new funding, noting that Brown’s offer had collapsed. When markets reopened 

the next day, on March 28, 2023, Virgin Orbit’s stock price dropped approximately 28.4%, from 

approximately $0.54 per share to $0.38 per share. A week later, on April 4, 2023, Virgin Orbit 

filed for bankruptcy, and on May 2, 2023, it was delisted from Nasdaq.  

V. CLAIMS FOR RELIEF 

FIRST CLAIM FOR RELIEF 

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]  
and Rule 10b-5(a)-(c) thereunder [17 C.F.R. §§ 240.10b-5(a)-(c)] 

(Against Defendants) 

37. The SEC re-alleges and incorporates paragraphs 1-36 above by reference as if fully 

set forth hereunder. 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 9 of 11   PageID 9



10 
 

38. By engaging in the acts and conduct alleged herein, and as alleged in paragraphs 

19-36 above, Defendants, directly or indirectly, singly or in concert with others, in connection with 

the purchase or sale of securities, by the use of any means or instrumentality of interstate 

commerce, or of the mails or of any facility of any national securities exchange: 

• employed a device, scheme, or artifice to defraud; and/or  

• made untrue statements of material facts, or omitted to state material facts 

necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; and/or   

• engaged in acts, practices, or courses of business which operated, or would 

operate, as a fraud or deceit upon any person. 

39. With regard to the violations of Section 10(b) of the Exchange Act and Rule 10b-

5(a), (b), and (c) thereunder, Defendants acted with scienter and engaged in the referenced acts 

knowingly and/or with severe recklessness. 

40. By reason of the foregoing, Defendants have violated, and unless enjoined will 

continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(a)-(c) 

thereunder [17 C.F.R. § 240.10b-5(a)-(c)].  

VI. PRAYER FOR RELIEF 

41. WHEREFORE, the SEC respectfully requests that this Court enter a Final 

Judgment:  

• Permanently restraining and enjoining Defendants from violating, directly 

or indirectly, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; 

• Permanently restraining and enjoining Brown from directly or indirectly, 

including but not limited to, through any entity owned or controlled by him, participating in the 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 10 of 11   PageID 10



11 
 

issuance, purchase, offer, or sale of any security; provided, however, that such injunction shall not 

prevent him from purchasing or selling securities for his own personal account;  

• Permanently barring Brown, pursuant to Section 21(d)(2) of the Exchange 

Act, from acting or serving as an officer or director of any issuer that has a class of securities 

registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file 

reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]; 

• Ordering Brown to pay a civil penalty pursuant to Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)]; and  

• Granting such other and further relief as this Court may deem appropriate, 

just, equitable, and/or necessary.  

VII. JURY DEMAND 
  

42. The SEC demands trial by jury in this action on all issues so triable. 

Dated:  June 17, 2024   Respectfully submitted, 
 
 

/s/ Patrick Disbennett____________ 
Patrick Disbennett 
Texas Bar No. 24094629 
United States Securities and Exchange Commission 
Fort Worth Regional Office 
Burnett Plaza, Suite 1900 
801 Cherry Street, Unit 18 
Fort Worth, TX  76102 
Telephone: (817) 266-9633 (Disbennett)  
Facsimile: (817) 978-4927 
[email protected] 

 
ATTORNEY FOR PLAINTIFF SECURITIES AND 
EXCHANGE COMMISSION 
 

 

Case 4:24-cv-00558-O   Document 1   Filed 06/17/24    Page 11 of 11   PageID 11