By On Monday, MoviePass ex-CEO Mitch Lowe pled guilty to securities fraud reports The Verge.
With the plea, Lowe reportedly admits to making false representations about the sustainability of a $9.95 monthly plan that promised ‘unlimited’ access to movies in theaters.
Lowe took over as CEO of MoviePass in 2016 and started allowing users to see a movie a day through an unlimited subscription in 2017. That quickly led to MoviePass’ demise, with the service shutting down in 2019 and ultimately filing for bankruptcy.
Following a settlement with the Federal Trade Commission in 2021, the Securities and Exchange Commission sued Lowe and Ted Farnsworth, former CEO of MoviePass’ parent company Helios and Matheson Analytics.
The FTC alleged the pair lied about the unlimited subscription to artificially inflate HMNY’s stock former CEO.
In addition to a $250,000 fine, Lowe faces up to five years in prison (although a lighter sentence is expected for his cooperation with the investigation).
Farnsworth remains in federal custody, with his trial over securities fraud scheduled for March 2025.
MoviePass was rebooted last year, offering a plan at $10 per month but capping the number of movies you can see.
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