Former CEO of MoviePass’ parent company faces up to 25 years in prison
CNN
The former chief executive of MoviePass’ parent company has pleaded guilty to charges of security fraud and conspiracy and could face up to 25 years in prison.
The former chief executive of MoviePass’ parent company has pleaded guilty to charges of security fraud and conspiracy and could face up to 25 years in prison. Theodore Farnsworth “engaged in schemes to defraud investors,” the US Department of Justice said in a statement Tuesday, while he was in charge of Helios and Matheson Analytics, the former parent company of MoviePass. Between 2017 and 2019, he made “materially false and misleading representations” of the once-popular movie-ticket subscription service in an attempt to attract new investors. His alleged actions also artificially inflated the company’s stock price, the Justice Department said. Farnsworth and J. Mitchell Lowe, the former CEO of MoviePass, once told investors that MoviePass’ business model of letting customers see unlimited movies in theaters for $9.95 per month was a sustainable business model. However, the pair knew that was false and used the pitch to inflate the parent company’s stock price, the DOJ said. Lowe pleaded guilty to securities fraud last September with sentencing scheduled for March, according to court records. He faces a maximum of five years in prison. Lowe “is a good man who is looking to move forward with his life,” his lawyers David Oscar Markus and Margot Moss said in statement. “He has accepted responsibility for his actions in this case and will continue to try to make things right.” “Farnsworth’s plans and promises for MoviePass seemed too good to be true — they were in fact part of a securities fraud scheme,” said James Dennehy, the assistant director in charge of FBI’s New York field office. “As he admitted [Tuesday], Farnsworth’s ploys and boasts were actually lies and misrepresentations designed to boost stock prices.”
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