The Execs Behind the MoviePass Debacle Are Now Facing Criminal Charges

Mitch Lowe and Ted Farnsworth already settled with the FTC over fraudulent activity affecting MoviePass customers, but now the former heads of MoviePass and its parent company, Helios and Matheson Analytics (HMNY), are facing criminal allegations of securities fraud and wire fraud. The Verge reports: The Department of Justice announced the charges today, saying false statements made by both men defrauded investors in HMNY when the execs pretended like the company's money-losing $9.95 "unlimited" moviegoing plan had any hope of profitability. HMNY's own auditor cast doubt on the company's viability in a report in 2018, but at the time, Farnsworth downplayed the advisory, telling Insider that "pretty much most" companies running at a loss would have a similar warning. But the big problem is his claims that HMNY's analytics prowess could somehow monetize data generated from MoviePass simply didn't hold up: prosecutors now allege "Farnsworth and Lowe knew HMNY did not possess these technologies or capabilities to monetize MoviePass's subscriber data or incorporate these technologies into the MoviePass application." [...] The DOJ says each man is facing one count of securities fraud and three counts of wire fraud over the lies they allegedly told in "press releases, SEC filings, interviews on podcasts and on television, and in print and online media."

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