Prosecutors say that Farnsworth and Lowe were aware that MoviePass's $9.95 per month unlimited offer was a 'temporary marketing gimmick to grow new subscribers.'
Mitch Lowe and Ted Farnsworth attend the New York premiere ofThe former CEOs of MoviePass and its parent company were indicted on securities fraud charges for misleading investors and making false statements about how successful the movie subscription service was, the Department of Justice announced on Friday.
Theodore Farnsworth, 60, former CEO of parent company Helios & Matheson, and Mitchell Lowe, 70, former CEO of MoviePass, allegedly schemed to inflate their stock price and attract investors by making false and misleading statements about how well the business was doing, federal prosecutors said. They have each been charged with one count of securities fraud and three counts of wire fraud and face a maximum penalty of 20 years in prison on each count if convicted.
Founded in 2011, MoviePass allowed users to attend a set number of movies in exchange for paying a monthly subscription fee. In 2017, they dropped their subscription fee to just $9.95 a month to see unlimited movies and sawFor movie lovers, it was a deal that seemed too good to be true. In April 2018, the company
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