SEC charges MoviePass enforcement with lying that its $10 price is sustainable

The Securities and Exchange Commission (SEC) filed a complaint against recently relaunched MoviePass. Based on DiversityThe SEC has accused former MoviePass CEO Mitch Lowe and Ted Farnsworth, the former CEO of parent company Helios and Matheson Analytics, of lying about how they viewed movie ticketing services for profit.

Furthermore, the SEC felt that the founders of MoviePass in its predecessor made promises that were “too good to be true” and allegedly used the time-strip before the company exploded to fraudulently profiting from its prospects. Because MoviePass’ infamous and ultimately unsuccessful $10 subscription plan allowed for an unlimited number of movie tickets to be sold out, Farnsworth and Lowe allegedly set up “fraudulent methods” to avoid losing money as a company. Those methods allegedly included blocking audience access to “six Bollywood movies” because they “financially killed us.”

In April 2018, the company introduced “Project 2%”, where it targeted the biggest and most loyal MoviePass users when their accounts kept experiencing “password interrupted” troubles. and “verify ticket”.

A spokesperson for Farnsworth sent the following statement to TechCrunch: “The complaint concerns matters related to an investigation that the company and other news outlets publicly disclosed nearly three years ago and Mr Farnsworth’s legal team will maintain the challenge against Mr. Farnsworth further asserts that he has always acted in good faith in the best interests of the company and its shareholders.”

MoviePass relaunched earlier this month with original creator Stacy Spikes at the helm. The business is currently in beta with a closed waitlist and “the only way to join is through an invitation from a friend.”

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