Former MoviePass CEO admits the $9.95 ‘unlimited’ ticket scheme was fraud

MoviePass ex-CEO Mitch Lowe pleaded blameworthy to securities fraud connected Monday implicit his engagement successful a strategy to mislead investors, arsenic reported earlier by Variety and The Hollywood Reporter. With the plea, Lowe admits to making mendacious representations astir the sustainability of a $9.95 monthly program that promised “unlimited” entree to movies successful theaters.

Lowe, who took implicit arsenic CEO of MoviePass successful 2016, started allowing users to spot a movie a time done an unlimited subscription successful 2017. But the money-burning maneuver eventually led to MoviePass’s demise, with the work shutting down successful 2019 and aboriginal filing for bankruptcy.

Following a colony with the Federal Trade Commission successful 2021, the Securities Exchange Commission sued Lowe and Ted Farnsworth, the erstwhile CEO of MoviePass genitor institution Helios and Matheson Analytics (HMNY), a twelvemonth later. The bureau alleged the brace lied astir the unlimited subscription to artificially inflate HMNY’s stock:

In summation to a $250,000 fine, Lowe faces up to 5 years successful situation (although a lighter condemnation is expected for his practice with the investigation, THR reports). Farnsworth remains successful national custody, with his proceedings implicit securities fraud scheduled for March 2025.

“Mitch is simply a bully antheral who is looking to determination guardant with his life,” Lowe’s attorneys, Margot Moss and David Oscar Markus, said successful a connection to Variety. “He has accepted work for his actions successful this lawsuit and volition proceed to effort to marque things right.”

MoviePass got a reboot past year — and portion it inactive offers a program astatine $10 per month, it present puts a headdress connected the fig of movies you tin see.