Two former MoviePass Inc. executives were charged with securities and wire fraud for allegedly scheming to defraud investors of the parent of the bankrupt company, Bloomberg News reported. Theodore Farnsworth, 60, of Miami, and J. Mitchell Lowe, 70, of Miami Beach, are accused of making false representations relating to Helios & Matheson Analytics Inc., which bought MoviePass in 2017 and ran it until it collapsed into bankruptcy in 2020. Farnsworth is the former chief executive officer of Helios & Matheson, while Lowe was MoviePass’s CEO from 2016 to 2020. Prosecutors allege the two men told investors that MoviePass’s plan to allow subscribers to see unlimited movies in theaters for $9.95 had been tested, was sustainable and would be profitable — while knowing it was simply a “temporary marketing gimmick” to gain new customers, artificially inflate the stock price and attract investors. They are also accused of falsely claiming that the company had technology that allowed it to generate revenue by analyzing and monetizing the data it collected from subscribers, and made misleading statements “about the positive impact that multiple revenue streams (other than subscription fees) were having on MoviePass’s profitability and self-sufficiency.”
