A man offered $200 million to buy Virgin Orbit, but he actually had less than $1.

Matthew Brown “made false and misleading statements and omissions about his investment experience and the funds available to make such an offering,” the SEC said in the lawsuit filed Monday in federal court in Texas. The regulator claimed Brown sent Virgin Orbit a fabricated screenshot of her company’s bank account, claiming she held $182 million when in reality her balance was less than $1.

Brown made the allegedly fictitious offer in March 2023, days after Virgin Orbit suspended operations to seek new financing options. The company had been reeling since a rocket malfunctioned two months earlier, which failed to reach orbit during its first launch from the United Kingdom. The company eventually filed for bankruptcy.

On March 23, 2023, Brown made an appearance on the CNBC show wearing a Texas Christian University hat and said he was in final discussions over a deal that would give him control of the British billionaire’s struggling satellite company .

“We are in active discussions to inject enough capital to make them cash flow positive,” said Brown, 34, who says he has invested in 13 space companies.

The sudden appearance of this unknown white knight investor caused Virgin Orbit’s shares to rise, but also prompted news reports that raised questions about Brown.

In its complaint, the SEC accused Brown of misleading the investing public during his television appearance because he “falsely represented himself as an experienced venture capitalist” and acted as if his Virgin Orbit’s purchase offer was legitimate.

But Brown subsequently failed to respond to Virgin Orbit’s due diligence requests and never financed the deal, according to the regulator. Brown also demanded, but never received, a dissolution fee from the company if the deal didn’t go through, the SEC said.

Brown did not immediately respond to a request for comment. A Virgin Group spokesperson declined to comment.

Dan Hart, former CEO of Virgin Orbit, said Brown’s offer was “an unnecessary distraction” as the management team “tried to find a path forward for the company.”

“It was a time when a number of investment avenues were appearing or disappearing. And so the adrenaline is pumping all the time. And then exhaustion sets in, then another call comes in, and the adrenaline kicks in. And that’s a bit of what we were experiencing at the time.

Branson, who has faced difficulties with his space business, pumped $1 billion into Virgin Orbit, a subsidiary of Virgin Galactic that aimed to send small satellites into space on its LauncherOne rocket.

In January 2023, the rocket experienced a malfunction, leading to the loss of all nine satellites on board and dealing a major blow to the company. A few months later, the company was on the verge of bankruptcy.

On March 15, 2023, Virgin Orbit announced that it would suspend operations while it conducted “discussions with potential funding sources.” Nearly a week later, Brown appeared on CNBC to discuss his plan to inject $200 million into the company. Virgin Orbit stock rebounded as much as 74% for its biggest intraday gain after facing sharp declines.

Negotiations quickly collapsed and the stock fell. Virgin Orbit had to stop its activities, filed for bankruptcy and cut 85% of its workforce.

The case is SEC v. Brown, 4:24-cv-558, United States District Court, Northern District of Texas (Fort Worth).

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