The former CEO of the company behind MoviePass has pleaded guilty to securities fraud and conspiracy charges, the U.S. Department of Justice announced Tuesday.
Theodore Farnsworth, who led Helios & Matheson Analytics Inc., the parent company of MoviePass, admitted to defrauding investors in a scheme involving both Helios & Matheson and Vinco Ventures Inc., another publicly traded firm.
According to the Justice Department, Farnsworth misled investors about the financial health and business prospects of these companies. He falsely claimed MoviePass’s business model and operations were sustainable, using these misrepresentations to inflate stock prices and deceive shareholders.
MoviePass, known for its unlimited movie ticket subscription model, garnered widespread attention before facing financial struggles that led to its eventual shutdown in 2019. Helios & Matheson also filed for bankruptcy, leaving investors facing significant losses.
Farnsworth’s plea is part of an ongoing investigation into fraudulent practices surrounding these companies. The case highlights the risks associated with misleading business strategies and the serious consequences for executives engaging in securities fraud.
The Justice Department has not yet announced Farnsworth’s sentencing date.
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