Mitch Lowe, one of the two MoviePass leaders He is indicted by the Department of Justice in 2022pleaded guilty to securities fraud. The former CEO admitted to conspiring to deceive the public and investors about the continuity of the service. Diversity reports Details of Lowe’s plea agreement were not released.
Prosecutors allege that Lowe knew all along that the company’s $9.95 “unlimited” plan was a short-term ploy to attract subscribers and boost stock. He is also accused of making false statements about MoviePass’s long-term viability in press releases, interviews and SEC filings.
These statements included falsehoods about the company’s ability to generate revenue solely through subscription fees and that it possessed technology that could monetize customer data. He also claimed that MoviePass makes a profit from multiple revenue streams, even though it has no revenue other than subscriptions.
Prosecutors also accused Lowe and Ted Farnsworth, former CEOs of MoviePass’ parent company Helios and Matheson, of preventing subscribers from getting what was promised from an “unlimited” subscription. Company It settled with the FTC in 2021 The service has vowed to block subscribers from getting movie tickets amid allegations that they intentionally invalidated their passwords to freeze their accounts. MoviePass and its parent company He filed for bankruptcy in 2020.
Although a sentencing date has not been set, Lowe is free on bond and has a status conference court date set for March 2025 in Miami. The 72-year-old former chief executive faces a maximum of five years in federal prison.
“Mitch is a good person who wants to move on with his life,” said Lowe’s attorneys Margot Moss and David Oscar Marcus. Diversity. “He has taken responsibility for his actions in this case and will continue to try to make things right.”
Meanwhile, Farnsworth is still in jail. He was originally released on a $1 million bond that was revoked in August 2023 after the feds accused him of misappropriating nearly $300,000 in company funds. Farnsworth’s ex-girlfriend, whom he met on an escort site, was paid $147,000 and bought a $144,000 Cadillac; After the couple broke up, the feds say he accused his ex of stealing the car.
