Judge Dismisses Majority of Claims but Allows Case to Move Forward

A US judge has given the go-ahead for Kusnier v. Virgin Galactic to continue. 

The case is a proposed class action lawsuit asserting that founder Richard Branson concealed problems in the Unity development program whilst selling overpriced stock to new investors. Most of the claims in the lawsuit were dismissed by District Judge Allyne Ross, and shareholders would have to prove that Virgin and Branson actually defrauded them into paying too much for a stock that has continued to fall since its early 2021 peak. The Ross decision said that they can sue over the $300+ million in stock that was sold by Virgin Galactic following its July 2021 Unity flight, but Shareholders will likely dissect every Virgin statement for additional ammunition for their case. The Lawsuit covers shareholders who owned stock in Virgin Galactic from July 10, 2019 to October 14, 2021, the day Virgin grounded Unity before commercial service. 

Virgin’s lawyers hold that the suit is incorrect, that there was never any proof of intent to defraud investors in the company. They maintain that Virgin had thoroughly disclosed all safety and design issues involved in developing the Unity system, and investors are asking too much of a groundbreaking, never-before-seen industry. Private space travel will always hold a much greater level of uncertainty from other investments, a natural outcome of the staggering technological and safety hurdles involved with tackling manned orbital flight for pay. 

FMI: www.virgingalactic.com