The MoviePass saga still isn’t over yet, as the Department of Justice has indicted two former company executives on securities fraud charges. The indictment was revealed today that Theodore Farnsworth, former president of Helios & Matheson Analytics Inc. (the former parent company of MoviePass), and J. defrauding investors through false and materially misleading statements relating to the business and operations of HMNY and MoviePass.” In a statement, Assistant Attorney General Kenneth A.
“As alleged, the defendants deliberately and publicly engaged in a fraudulent scheme designed to wrongly promote their company’s stock prices,” added Assistant Director-in-charge Michael J. Driscoll of the FBI’s New York Field Office. “Fraud attempts of this nature undermine public confidence in our financial markets. The FBI is committed to ensuring that these types of fraud and fraud are exposed and that perpetrators are held accountable for their actions in the criminal justice system.”
According to a Department of Justice press release regarding the accusations, Farnsworth and Lowe erroneously claimed that the previously used “unlimited plan” from MoviePass, which cost less than $10 per month, has been “tested and sustained and will be profitable or equivalent on subscription fees.” He goes on to say that the couple were aware that this ploy, which has generally become the main selling point of MoviePass, was not sustainable and “was a temporary marketing method to increase the number of new subscribers.”
The couple also allegedly claimed that they were able to “generate revenue by analyzing and monetizing data collected from MoviePass from subscribers”, with the indictment revealing that they had no capabilities to carry out such claims.
Perhaps to curb all that, and to make many former MoviePass subscribers exclaim “I know it!” However, the indictment from the Department of Justice revealed that the couple working for MoviePass “implement numerous tactics to prevent certain subscribers from using the allegedly ‘unlimited’ service for which they have been paid to attempt to alleviate MoviePass’s cash shortfall.” Farnsworth and Lowe are each charged with securities fraud and three counts of electronic fraud, which could face up to 20 years in prison on each count.
MoviePass has since been acquired by co-founder Stacy Spikes, who was given ownership of the company after the brand ceased operations in 2020, with plans to relaunch the previously announced service.
(Cover image by Andrew Harrer/Bloomberg via Getty Images)
.
[ad_2]
