Former MoviePass Execs Accused of Fraud by SEC
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.”