Mitchell Lowe, former CEO of MoviePass, has been charged with fraud for misleading investors about the company’s movie-everyday subscription plan. The Department of Justice issued a press release on Friday, November 4, outlining the charges against Mitchell Lowe and his co-conspirator, Theodore Farnsworth, former CEO of Helios and Matheson, public MoviePass parent company.
According to the Department of Justice, Mitchell Lowe and his co-conspirators were charged with one count of securities fraud and three counts of wire fraud. According to the charges, the defendants engaged in criminal activity that “artificially inflated HMNY’s stock price and attracted new investors” while the company was suffering heavy losses.
According to the indictment, Farnsworth, 60, and Lowe, 70, knowingly conspired to defraud MoviePass investors by providing false evidence about the site’s “unlimited” plan, which allowed people Subscribe to one movie per day for a monthly fee of $10. The new business strategy that ultimately led to the company’s downfall was misrepresented to investors who believed it was viable and market-tested to generate profits.
Former MoviePass exec and parent charged with securities fraud https://t.co/9yNcgaS8cr
– Criminal Division (@DOJCrimDiv) November 4, 2022
Mitchell Lowe defrauded investors and bankrupted the company.
Mitchell Lowe, CEO of MoviePass, introduced a viewing membership for $9.95 a month in 2017. It has grown from 20,000 subscribers to over 3 million. However, unsustainable subscription models have left the company at a loss. Two years after they ceased registration, the corporation filed for bankruptcy.
According to officials, Lowe and his accomplices knew that the promises they made to investors were false when they abused Helios and Matheson Analytics to support their strategy. According to court filings, the defendants misled investors by claiming the subscription was built with artificial intelligence despite using no such technology.
In the press release, the Ministry of Justice stated:
“Farnsworth and Lowe allegedly falsely claimed that HMNY had and used technology, such as ‘big data’ and ‘artificial intelligence’ platforms, to monetize by analytics and earning money from data obtained from MoviePass members.”
They went on to say:
“However, the indictment alleges that Farnsworth and Lowe knew that HMNY did not have the necessary technology and capabilities to commercialize MoviePass subscriber data or integrate such technologies into the MoviePass app.”
On September 27, 2022, the Securities and Exchange Commission filed charges with identical charges, alleging that it created fake invoices to demonstrate more than $310,000 in personal interests. Farnsworth’s representative, Chris Bond, said the company intends to fight the claim until the defendant is acquitted of all charges. A year after MoviePass declared bankruptcy, co-founder Stacy Spikes bought the company in hopes of reviving the business she was forced to leave in 2018. Spikes said she plans to continue. trade by offering memberships for $10, $20 or $30, depending on the marketplace. case. According to the website, it will be broadcast on November 9, 2022.
Categories: Entertaintment
Source: vcmp.edu.vn