Former MoviePass CEO Mitch Lowe has pleaded guilty to securities fraud conspiracy
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- Former MoviePass CEO Mitch Lowe has pleaded guilty to securities fraud conspiracy.
- Lowe's actions as CEO helped push MoviePass and its parent company into bankruptcy in 2020.
- Lowe faces up to five years in prison.
Mitch Lowe, the former CEO of MoviePass, has pleaded guilty to securities fraud conspiracy, Variety reported on Monday.
Lowe, whose actions as CEO helped drive the popular movie-ticket-subscription app into bankruptcy, admitted to conspiring to deceive the public and investors.
Lowe, 72, faces up to five years in federal prison.
"Mitch is a good man who is looking to move forward with his life," Margot Moss and David Oscar Markus, Lowe's lawyers, said in a statement to Business Insider. "He has accepted responsibility for his actions in this case and will continue to try to make things right."
Lowe became the CEO of MoviePass in the spring of 2016, taking the reins from cofounder Stacy Spikes. A year later, Helios and Matheson Analytics (HMNY) became the parent company of MoviePass. Lowe and HMNY CEO Ted Farnsworth launched a $10-a-month plan that brought huge popularity to the service. As subscriptions soared into the millions, HMNY's stock skyrocketed.
However, the $10 plan — which allowed subscribers to see a movie a day in theaters — was not sustainable, and the company burned through hundreds of millions of dollars. By 2020, both MoviePass and HMNY went bankrupt.
MoviePass/Reuters
Lowe and Farnsworth were charged in a securities fraud case in 2022 by the Department of Justice. The DOJ alleged that Lowe and Farnsworth "engaged in a scheme to defraud investors through materially false and misleading representations relating to HMNY and MoviePass's business and operations to artificially inflate the price of HMNY's stock and attract new investors."
Farnsworth, whose bail was revoked in August 2023, is currently in Florida prison awaiting his trial in March.
Spikes, who was ousted by Lowe and Farnsworth from MoviePass in 2018, bought back the company in 2021.
MoviePass — under Spikes' leadership — is currently available nationwide.
The story of the rise and fall of MoviePass is chronicled in the documentary "MoviePass, MovieCrash," which was released in May and is based on BI's award-winning reporting.