The US Securities and Exchange Commission has filed a lawsuit against two former MoviePass executives. In a federal complaint seen by Bloomberg, the agency accused Theodore Farnsworth and Mitch Lowe on Monday of misleading investors about the viability of the company’s $9.95 per month business model.Farnsworth was the chief executive officer of Helios and Matheson Analytics, the parent company of MoviePass between 2017 and 2020. Lowe led MoviePass between 2016 and its collapse in 2020. The SEC alleges Farnsworth and Lowe “intentionally” and “repeatedly” shared false information.“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&rs
