Theodore Farnsworth, former CEO of the parent company of MoviePass, pleaded guilty to securities fraud on Tuesday. He had misled investors about the company’s “unlimited” subscription plan, which promised customers unlimited movie theater visits for $9.95 a month.
Prosecutors said Farnsworth and his team made false claims about the plan’s success and capabilities, including its use of advanced analytics tools. However, the plan was actually a financial disaster due to the high cost per admission. Despite this, three million people signed up, leading to the company’s collapse in 2019.
Farnsworth faces up to 20 years in prison for the securities fraud count and five years for the conspiracy count related to his leadership of Vinco Ventures, another publicly traded company. His lawyer stated that Farnsworth accepted responsibility for his actions by pleading guilty.
In contrast, J. Mitchell Lowe, who previously pleaded guilty to a similar charge, received a more lenient sentence. MoviePass has since returned in 2022 with a new tiered fee system and no longer offers the unlimited plan.
Source: https://www.nytimes.com/2025/01/07/business/moviepass-ceo-fraud-guilty.html