MoviePass executive pleads guilty to securities fraud

It seems like the saga of MoviePass just keeps unfolding! Recently, Ted Farnsworth, the former CEO of MoviePass’ parent company, found himself in some legal trouble. He pleaded guilty to securities fraud, only a few months after the former MoviePass CEO, Mitch Lowe, entered a guilty plea of his own.

Farnsworth admitted to one count of securities fraud and another count of conspiracy to commit securities fraud. The consequences could be severe, with a maximum of 20 years in prison for the former and up to five years for the latter charge. A sentencing hearing is on the horizon to determine his fate.

The Department of Justice accused Farnsworth of deceiving investors in MoviePass’ parent company, Helios & Matheson Analytics (HMNY). Allegedly, he provided false and misleading information about HMNY and MoviePass to boost stock prices and attract more investors.

This might ring a bell because Mitch Lowe, the former MoviePass CEO, faced similar charges back in September. He decided to cooperate with authorities, which likely added pressure on Farnsworth to confess.

For those who aren’t familiar, MoviePass allowed subscribers to see unlimited movies for just $9.95 per month. Farnsworth and Lowe assured investors that the business model was solid and would be profitable based solely on subscription fees. However, according to the DOJ, this was just a ploy to inflate the stock price.

Surprisingly, it turned out that MoviePass was actually losing money. The company went bankrupt in 2020, and both Farnsworth and Lowe have now admitted their guilt in court.

Despite this scandal, MoviePass has resurfaced with a new owner and business strategy. So, while the story had a dark chapter, it seems there may still be hope for this once-popular movie-watching service.