Bloomberg Law
Free Newsletter Sign Up
Login
BROWSE
Bloomberg Law
Welcome
Login
Advanced Search Go
Free Newsletter Sign Up

Trump Defense Department Officials Resurface at Space Company

Oct. 6, 2021, 12:00 PM

Former Defense Department General Counsel Paul Ney is joining Momentus Inc., marking the third Trump DOD official to join the space infrastructure company recently targeted by the Securities and Exchange Commission.

Ney is joining California-based Momentus as chief legal officer, the company announced Monday. He reunites with a pair of other former Trump Defense Department officials: Momentus CEO John Rood and President Fred Kennedy.

Ney is the most recent Trump administration lawyer to surface in the private sector since leaving government. Some told Bloomberg Law in June that they faced difficulties getting in the door, as some companies and law firms looked to distance themselves from the administration.

Momentus plans to offer space infrastructure services, including in-space transportation, satellites-as-a-service, and in-orbit servicing, according to its website.

The company looked to go public via a SPAC merger with Stable Road Acquisition Group earlier this year, originally valued at $1.2 billion and later $700 million. The SEC sued Momentus and Stable Road in July, accusing them of misleading shareholders and lying about testing their products in space. Momentus went public on Aug. 13, after the companies agreed to pay $8 million to settle the matter.

Ney spent more than two years as the Defense Department’s chief legal officer during the creation of the Space Force and Space Command. Previously, he was the Navy’s acting general counsel under President George W. Bush, and served as chief deputy attorney general for the State of Tennessee. Ney was also a partner in the law firms Trauger, Ney & Tuke, and Patterson Intellectual Property Law, P.C., according to a Momentus press release.

“Paul and I collaborated on the most critical national security and defense challenges during our time at the Pentagon and I look forward to his partnership at Momentus,” Rood, who was undersecretary for defense policy in the Trump administration, said in the release. “His leadership is crucial to our team as we navigate the opportunities of a developing space economy, grow the Company, and implement our National Security Agreement.”

Kennedy, the company’s president, was the Space Development Agency’s director under Trump.

SEC Settlement

The SEC accused Momentus of lying about the 2019 test performance of its prototype microwave electro-thermal water plasma thruster, designed to move satellites into custom orbit, the agency said in a filing.

In addition to the settlement payment, Momentus pledged to create an independent board committee and retain an internal compliance consultant for two years to enhance its disclosure protocols, the SEC said in a press release. Momentus and Stable Road were also required to allow investors to terminate their subscription agreements before the shareholder vote to go public in August.

The SEC is pursuing further action against Momentus’s founder and former CEO Mikhail Kokorich in the U.S. District Court for the District of Columbia, where the complaint is still pending, a spokesperson said.

“This case illustrates risks inherent to SPAC transactions, as those who stand to earn significant profits from a SPAC merger may conduct inadequate due diligence and mislead investors,” said SEC Chair Gary Gensler in a press release in July. “Stable Road, a SPAC, and its merger target, Momentus, both misled the investing public.”

Momentus signed a national security agreement with the Defense Department and Treasury Department in June, on behalf of the Committee on Foreign Investment in the United States. The move was part of a wider push on their “path to flight,” then-interim CEO Dawn Harms said in a June statement.

—With assistance from Ruiqi Chen

To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com