SEC Accuses MoviePass Execs Of Lying That Its $10 Price Was Sustainable
The Securities and Exchange Commission (SEC) has filed a complaint against the embattled and recently relaunched MoviePass. According to Variety, the SEC has accused former MoviePass CEO Mitch Lowe and Ted Farnsworth, the former CEO of parent company Helios and Matheson Analytics, of lying about how they viewed the movie ticketing service to be profitable.
Further, the SEC feels that MoviePass' founders in its previous incarnation made «too good to be true» promises and allegedly used the runway of time before the company imploded to fraudulently further profit from its prospects. As MoviePass' infamous and ultimately unsuccessful $10 subscription plan that enabled an unlimited amount of movie tickets played out, Farnsworth and Lowe allegedly instituted «fraudulent methods» to avoid losing money as a company. Those methods allegedly included blocking moviegoers' access to «six Bollywood films» because they were «killing us financially.»
In April 2018, the company introduced «Project 2%,» where the most loyal and biggest MoviePass users were targeted by the company to have their accounts run into repeated «password disruption» and «ticket verification» hassles.
A spokesperson for Farnsworth sent the following statement to TechCrunch: «The complaint concerns matters subject to an investigation that the company and other news outlets publicly disclosed nearly three years ago, and Mr. Farnsworth's legal team will maintain the challenge to this complaint. Mr. Farnsworth continues to maintain that he has always acted in good faith in the best interests of his companies and shareholders.»
MoviePass relaunched earlier this month with original creator Stacy Spikes at the helm. The business is currently in beta with its waitlist
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