Mitchell Lowe, former CEO of MoviePass, has been charged with fraud for misleading investors about the company’s movie-everyday subscription plan. The Justice Department released a press release on Friday, November 4, outlining the charges against Mitchell Lowe and co-conspirator Theodore Farnsworth, the former CEO of Helios and Matheson, the parent company of MoviePass. .
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 allegation, the defendants committed the offense “to artificially increase the price of HMNY’s stock and attract new investors” while the company was suffering heavy losses.
According to the indictment, Farnsworth, 60, and Lowe, 70, knowingly conspired to mislead MoviePass investors by providing false evidence about the site’s “unlimited” plan, which allowed people Subscribe to one movie per day for a monthly cost of $10. The new business strategy that ultimately led to the company’s demise was misrepresented to investors, who were convinced it was sustainable and had been market-tested to generate profits. .
Former CEOs of MoviePass and Parent Company Charged in Securities Fraud Scheme https://t.co/9yNcgaS8cr
– Criminal Division (@DOJCrimDiv) November 4, 2022
Mitchell Lowe misled investors and bankrupted the company.
Mitchell Lowe, CEO of MoviePass, introduced a viewing membership for $9.95 per 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 registered, the company filed for bankruptcy.
According to officials, Lowe and his accomplices knew that the promises they made to investors were incorrect when they used Helios and Matheson Analytics incorrectly to support their strategy. According to court filings, the defendants misled investors by claiming that the subscription scheme was built using artificial intelligence when no such technology was used.
In a statement, the Justice Department said:
“Farnsworth and Lowe allegedly falsely stated that HMNY has been using technology, such as “big data” and “artificial intelligence” platforms, to monetize analytics and monetize data obtained from MoviePass members.”
They went on to say:
“However, the indictment states that Farnsworth and Lowe knew that HMNY lacked the technology and capacity needed to commercialize MoviePass subscriber data or integrate these technologies into the MoviePass app.”
On September 27, 2022, the Securities and Exchange Commission filed charges with identical claims, alleging that it had generated fraudulent invoices to demonstrate more than $310,000 in personal interests. core. Farnsworth’s representative, Chris Bond, said that the company intends to fight the claims until the defendant is cleared 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 says she plans to continue. trade by offering memberships for $10, $20 or $30, depending on market circumstances. According to the website, it will be released on November 9, 2022.
Let the article source Mitchell Lowe Is Accused Of Scamming The Investors With The Subscription Plan of website nyse.edu.vn
Categories: Biography