Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Richard Branson must face lawsuit in U.S. over Virgin Galactic space travel problems

Stock Markets Nov 07, 2022 02:47PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Billionaire entrepreneur Richard Branson departs with his crew prior to boarding, for travel to the edge of space in Virgin Galactic's passenger rocket plane VSS Unity, near Truth or Consequences, New Mexico, U.S., July 11, 2021. REUTERS/Joe S
 
SPCE
+3.73%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Jonathan Stempel

NEW YORK (Reuters) - A U.S. judge on Monday said British billionaire entrepreneur Richard Branson must face shareholder claims he concealed problems in Virgin Galactic Holdings (NYSE:SPCE) Inc's spaceship program, and sold hundreds of millions of dollars of stock at inflated prices.

While dismissing most claims in the proposed class action, U.S. District Judge Allyne Ross in Brooklyn said shareholders could try to prove that Virgin and Branson defrauded them into overpaying for the space tourism company's shares, which now trade more than 90% below their February 2021 peak.

Shareholders can sue over July 2019 statements that Virgin had made "great progress" overcoming "hurdles" to commercial spaceflight, despite a near-disastrous test flight five months earlier when its rocket plane Unity suffered critical damage.

Branson must also defend his July 2021 statement that his own just-completed flight on Unity, where he soared 50 miles (80.47 km) above the earth, had been "flawless" though Unity had strayed from its assigned airspace.

In a 55-page decision, Ross said shareholders also could sue over approximately $301 million of stock that Branson sold the month after the flight.

Lawyers for Virgin and Branson did not immediately respond to requests for comment.

In seeking a dismissal, they said there was no proof of intent to defraud, and that the defendants had thoroughly disclosed safety and design issues in developing commercial space travel, "unquestionably a high-risk proposition."

Laurence Rosen, a lawyer for the shareholders, declined to comment.

Virgin is based in Tustin, California, and went public in October 2019 by merging with a special purpose acquisition vehicle, Social Capital.

The lawsuit covers shareholders who owned the stock of either from July 10, 2019, to Oct. 14, 2021, when Virgin grounded Unity and delayed its commercial space travel service. Its shares fell 16.8% the next day, to $20.01.

Branson, 72, is worth $3.7 billion, according to Forbes magazine.

In Monday afternoon trading, Virgin shares were up 5 cents at $4.97.

The case is Kusnier et al v. Virgin Galactic Holdings Inc et al, U.S. District Court, Eastern District of New York, No. 21-03070.

Richard Branson must face lawsuit in U.S. over Virgin Galactic space travel problems
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Blloc Blloc
Blloc Blloc Dec 23, 2022 2:19AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biggest fraud person in NYSE, must be behind bar.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email