Former MoviePass CEO admits the $9.95 ‘unlimited’ ticket scheme was fraud
Mitch Lowe in HBO’s MoviePass, MovieCrash documentary. | Image: HBO
MoviePass ex-CEO Mitch Lowe pleaded guilty to securities fraud on Monday over his involvement in a scheme to mislead investors, as reported earlier by Variety and The Hollywood Reporter. With the plea, Lowe admits to making false representations about the sustainability of a $9.95 monthly plan that promised “unlimited” access to movies in theaters.
Lowe, who took over as CEO of MoviePass in 2016, started allowing users to see a movie a day through an unlimited subscription in 2017. But the money-burning tactic eventually led to MoviePass’s demise, with the service shutting down in 2019 and later filing for bankruptcy.
Following a settlement with the Federal Trade Commission in 2021, the Securities and Exchange Commission sued Lowe and Ted Farnsworth, the former CEO of MoviePass parent company Helios and Matheson Analytics (HMNY), a year later. The agency alleged the pair lied about the unlimited subscription to artificially inflate HMNY’s stock:
These representations, which were made to artificially inflate HMNY’s stock price and fraudulently attract new investors, were materially false and misleading… In truth and in fact, and as Coconspirator 1 [Farnsworth] and LOWE knew… The $9.95 “unlimited” plan was a temporary marketing gimmick to drive subscriber growth, and MoviePass was losing money as a result.
In addition to a $250,000 fine, Lowe faces up to five years in prison (although a lighter sentence is expected for his cooperation with the investigation, THR reports). Farnsworth remains in federal custody, with his trial over securities fraud scheduled for March 2025.
“Mitch is a good man who is looking to move forward with his life,” Lowe’s attorneys, Margot Moss and David Oscar Markus, said in a statement to Variety. “He has accepted responsibility for his actions in this case and will continue to try to make things right.”
MoviePass got a reboot last year — and while it still offers a plan at $10 per month, it now puts a cap on the number of movies you can see.
Mitch Lowe in HBO’s MoviePass, MovieCrash documentary. | Image: HBO
MoviePass ex-CEO Mitch Lowe pleaded guilty to securities fraud on Monday over his involvement in a scheme to mislead investors, as reported earlier by Variety and The Hollywood Reporter. With the plea, Lowe admits to making false representations about the sustainability of a $9.95 monthly plan that promised “unlimited” access to movies in theaters.
Lowe, who took over as CEO of MoviePass in 2016, started allowing users to see a movie a day through an unlimited subscription in 2017. But the money-burning tactic eventually led to MoviePass’s demise, with the service shutting down in 2019 and later filing for bankruptcy.
Following a settlement with the Federal Trade Commission in 2021, the Securities and Exchange Commission sued Lowe and Ted Farnsworth, the former CEO of MoviePass parent company Helios and Matheson Analytics (HMNY), a year later. The agency alleged the pair lied about the unlimited subscription to artificially inflate HMNY’s stock:
These representations, which were made to artificially inflate HMNY’s stock price and fraudulently attract new investors, were materially false and misleading… In truth and in fact, and as Coconspirator 1 [Farnsworth] and LOWE knew… The $9.95 “unlimited” plan was a temporary marketing gimmick to drive subscriber growth, and MoviePass was losing money as a result.
In addition to a $250,000 fine, Lowe faces up to five years in prison (although a lighter sentence is expected for his cooperation with the investigation, THR reports). Farnsworth remains in federal custody, with his trial over securities fraud scheduled for March 2025.
“Mitch is a good man who is looking to move forward with his life,” Lowe’s attorneys, Margot Moss and David Oscar Markus, said in a statement to Variety. “He has accepted responsibility for his actions in this case and will continue to try to make things right.”
MoviePass got a reboot last year — and while it still offers a plan at $10 per month, it now puts a cap on the number of movies you can see.