Theodore Farnsworth: Last News

A little over a month after the U.S. Securities and Exchange Commission sued two former top execs at MoviePass and its parent company, Helios + Matheson, for fraud, the Justice Department today unsealed an indictment charging those same executives, Theodore Farnsworth and J. Mitchell Lowe, each with one count of securities fraud and three counts of wire fraud. If convicted, they face a maximum penalty of 20 years in prison on each count. At the time of the alleged fraud, Farnsworth was Helios + Matheson’s Chairman and CEO, and Lowe was MoviePass’s CEO. 

Gene Maddaus Senior Media Writer A former MoviePass executive was arrested Tuesday on charges that he embezzled $260,000 from the company to pay for a party at Coachella Music Festival. Khalid Itum, 42, was indicted on two counts of wire fraud and two counts of money laundering. The charges allege that Itum submitted sham invoices to MoviePass to pay for the marketing event, which he had run through a separate company that he owned and controlled. MoviePass collapsed in 2019, after losing hundreds of millions of dollars on its all-you-can-watch theatrical subscription business. Last November, the two top executives — Theodore Farnsworth and Mitch Lowe — were indicted on securities fraud charges for allegedly deceiving investors about the sustainability of the business.

Gene Maddaus Senior Media Writer MoviePass was founded on a lie, the Securities and Exchange Commission alleged in a complaint filed on Monday night. The company introduced its $9.95-a-month, all-you-can-watch subscription plan in August 2017. According to the complaint, executives Theodore Farnsworth and Mitch Lowe knew that the offer was just a “marketing gimmick” and that the price was unsustainably low. But in public, they claimed that they had done rigorous market testing and determined they could turn a profit. In fact, they had done no testing, the SEC said. Asked by Variety if the company would eventually have to raise its prices, Farnsworth said, “The answer is no.” Critics, he went on, “don’t understand our business model.”