The U.S. Securities and Exchange Commission has sued former top execs at MoviePass and its parent company, Helios + Matheson, for fraud.A complaint filed with the U.S.
District Court for New York’s southern district (read it HERE) centers on Ted Farnsworth and Mitch Lowe. They “intentionally and repeatedly disseminated to the public materially false or misleading statements concerning MoviePass and key aspects of MoviePass’s business model,” the suit says.
The duo allegedly misled investors by suggesting the company could profit by offering all-you-can eat moviegoing for just $9.95 a month.The digital movie ticketing firm sought to popularize fixed-price ticket buying, a tool widely used in many international markets, but ran afoul of major exhibitors and then its customers after deciding to offer an unsustainable monthly price.
After slashing the monthly price from its previous levels of $40 to $50 a month, the company still had to fulfill customer orders for tickets.
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