Posted by BeauHD from the short-term-gimmicks dept.
Former MoviePass CEO Mitch Lowe pleaded guilty to securities fraud, admitting he misled investors about the viability of the company’s $9.95-a-month movie subscription service, and faces up to five years in prison. His co-defendant, former Helios and Matheson CEO Ted Farnsworth, faces similar charges and is scheduled for trial in March 2025; Farnsworth has been in federal custody since August 2023 due to bond violations involving misuse of company funds. Variety reports: Farnsworth and Lowe were the architects of MoviePass’ doomed all-you-can-watch offering, which resulted in hundreds of millions of dollars in investor losses in 2017 and 2018. Investigators found that Lowe tried to stem the losses by throttling the service, forcing high-volume users to reset their passwords and verify their tickets. The two men were charged in November 2022 on counts of wire fraud and securities fraud. According to Lowe’s plea agreement, the government estimates the total losses from the scheme at $303 million — though Lowe contends it is less than that. Lowe remains free on bond, and is due back in court in Miami on March 21 for a status conference. Lowe published a memoir in 2022 in which he reflected on the downfall of MoviePass, entitled “Watch and Learn: How I Turned Hollywood Upside Down with Netflix, Redbox, and Moviepass.”
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