MoviePass ex-CEO Mitch Lowe pleaded guilty to securities fraud on Monday over his involvement in a scheme to mislead investors, as reported earlier by Variety and The Hollywood Reporter. With the plea, Lowe admits to making false representations about the sustainability of a $9.95 monthly plan that promised “unlimited” access to movies in theaters.
These representations, which were made to artificially inflate HMNY’s stock price and fraudulently attract new investors, were materially false and misleading… In truth and in fact, and as Coconspirator 1 [Farnsworth] and LOWE knew… The $9.95 “unlimited” plan was a temporary marketing gimmick to drive subscriber growth, and MoviePass was losing money as a result.
In addition to a $250,000 fine, Lowe faces up to five years in prison (although a lighter sentence is expected for his cooperation with the investigation, THR reports). Farnsworth remains in federal custody, with his trial over securities fraud scheduled for March 2025.
“Mitch is a good man who is looking to move forward with his life,” Lowe’s attorneys, Margot Moss and David Oscar Markus, said in a statement to Variety. “He has accepted responsibility for his actions in this case and will continue to try to make things right.”
