Movie Pass

Former CEO of MoviePass’ Parent Company Faces Up to 25 Years in Prison

Theodore Farnsworth, former CEO of Helios and Matheson Analytics, the parent company of MoviePass, has pleaded guilty to securities fraud and conspiracy charges. He faces a potential prison sentence of up to 25 years, the U.S. Department of Justice (DOJ) announced Tuesday.

Farnsworth was accused of defrauding investors between 2017 and 2019 by making false and misleading statements about MoviePass, the popular movie-ticket subscription service that once offered unlimited movie tickets for $9.95 per month. According to the DOJ, Farnsworth’s misrepresentations were part of a scheme to attract investors and inflate the company’s stock price.

The former CEO, along with J. Mitchell Lowe, MoviePass’ CEO at the time, promoted the subscription model as sustainable despite allegedly knowing it was not. The DOJ also alleged that Farnsworth falsely claimed Helios and Matheson used artificial intelligence to monetize subscriber data, a capability the company did not possess or implement.

“Farnsworth’s promises about MoviePass were nothing more than lies designed to deceive investors and boost stock prices,” said James Dennehy, assistant director of the FBI’s New York field office.

Lowe, who previously pleaded guilty to securities fraud in September, faces a maximum sentence of five years. His sentencing is set for March. Lawyers representing Lowe described him as a “good man” who has taken responsibility for his actions and aims to move forward with his life.

In a statement, Farnsworth’s attorney, Sam Rabin, said his client was eager to take responsibility for his conduct, which he acknowledged by pleading guilty to the charges.

MoviePass, which debuted in 2017, quickly gained popularity with its budget-friendly subscription model, amassing 3 million subscribers in less than a year. However, the service’s business model proved unsustainable, and the company collapsed in 2019.

Since then, MoviePass has been relaunched under new leadership, but the revamped service no longer offers unlimited movie access.

Farnsworth pleaded guilty to one count of securities fraud, carrying a maximum sentence of 20 years, and one count of conspiracy to commit securities fraud, which carries a five-year maximum sentence. A sentencing date has yet to be determined.

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