SEC Sues Former MoviePass Executives, Alleges They Made 'False or Misleading Statements' To Public

The Securities and Exchange Commission is suing former MoviePass CEO Mitch Lowe and Ted Farnsworth, the former CEO of MoviePass' parent company, Helios and Matheson Analytics (HMNY), alleging they mislead investors that the company could make a profit at its $10-a-month plan. From a report: A complaint filed late Monday, reviewed by Insider, said the duo made "false or misleading statements" in financial filings and in the press. "Faced with debilitating negative cash flows -- rather than tell the public the truth -- Farnsworth and Lowe devised fraudulent tactics to prevent MoviePass's heavy users from using the service, and falsely and misleadingly informed the public that usage had declined naturally or due to measures the company had employed to combat subscribers' purported violations of MoviePass's terms and conditions of service," the complaint said. The lawsuit also named former MoviePass Vice President Khalid Itum as a defendant. The complaint accused Itum of submitting false invoices and receiving more than $310,000 from both MoviePass and HMNY.

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