The former CEO of MoviePass, Ted Farnsworth, pleaded guilty Tuesday, Jan. 7, to fraud for lying to investors about the success of the company. Now, he faces up to 25 years in prison.
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The subscription service gained a lot of attention in 2017, promising unlimited access to movies at theaters for just $9.95 a month. But that proved to be unattainable, despite reaching a peak of 3 million subscribers in 2018, with the company eventually filing for bankruptcy in 2020.
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According to the Justice Department, Farnsworth, who’s been in federal custody since August 2023, falsely claimed the plan for the company was tested, sustainable and would be profitable, or at least break even on subscription fees alone. Now, he’s accused of knowing all along that the $9.95 unlimited price was a temporary marketing gimmick intended to attract new investors.
Farnsworth also pleaded guilty to conspiracy to commit securities fraud as the leader of another publicly traded company, Vinco Ventures, Inc. Prosecutors said he tried to inflate its stock price and took millions of dollars from the company for himself.
He faces five years on this count and another 20 for MoviePass. A sentencing date hasn’t been set yet.
As for MoviePass, the company has new management, and a new business model, with plans to relaunch at some point, but no specific timeline has yet been released.
[Karah Rucker]
THE FORMER C-E-O OF “MOVIE PASS” PLEADED GUILTY TO FRAUD … FOR LYING TO INVESTORS ABOUT THE SUCCESS OF THE COMPANY.
NOW – HE FACES UP TO 25 YEARS IN PRISON.
THE SUBSCRIPTION SERVICE GAINED A LOT OF ATTENTION IN 20-17 … PROMISING UNLIMITED ACCESS TO MOVIES AT THEATERS FOR JUST 9-95 A MONTH.
BUT, THAT PROVED TO BE UNATTAINABLE DESPITE REACHING A PEAK OF 3 MILLION SUBSCRIBERS IN 20-18 WITH THE COMPANY EVENTUALLY FILING FOR BANKRUPTCY IN 20-20.
ACCORDING TO THE JUSTICE DEPARTMENT EX C-E-O TED FARNSWORTH … WHO’S BEEN IN FEDERAL CUSTODY SINCE AUGUST 20-23 … FALSELY CLAIMED THE PLAN FOR THE COMPANY WAS TESTED, SUSTAINABLE AND WOULD BE PROFITABLE OR AT LEAST BREAK EVEN ON SUBSCRIPTION FEES ALONE – WHILE KNOWING ALL ALONG THE 9-95 UNLIMITED PRICE WAS A TEMPORARY MARKETING GIMMICK TO ATTRACT NEW INVESTORS.
FARNSWORTH ALSO PLEADED GUILTY TO CONSPIRACY TO COMMIT SECURITIES FRAUD AS THE LEADER OF ANOTHER PUBLICLY TRADED COMPANY … VINCO VENTURES.
PROSECUTORS SAY HE TRIED TO INFLATE ITS STOCK PRICE AND TOOK MILLIONS OF DOLLARS FROM THE COMPANY FOR HIMSELF.
HE FACES FIVE YEARS ON THIS COUNT AND ANOTHER 20 FOR MOVIE PASS.
A SENTENCING DATE HASN’T BEEN SET YET.
AS FOR MOVIE PASS … THE COMPANY NOW HAS NEW MANAGEMENT AND A NEW BUSINESS MODEL – WITH PLANS TO RELAUNCH AT SOME POINT, BUT NO SPECIFIC TIMELINE HAS BEEN RELEASED.
FOR SAN – I’M KARAH RUCKER.
… FOR ALL YOUR LATEST NEWS HEADLINES – DOWNLOAD THE STRAIGHT ARROW NEWS APP TODAY.
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