The U.S. Securities and Exchange Commission filed a lawsuit against former executives of the controversial cinema subscription service MoviePass, alleging they made fraudulent statements about the business.
The market regulator said that for more than two years, Theodore Farnsworth and former Netflix executive Mitchell Lowe, who were CEOs of Helios and Matheson Analystics and MoviePass, respectively, "intentionally and repeatedly" disseminated materially false or misleading statements about the business, according to a filing with the U.S. District Court in New York on Monday.
"Farnsworth and Lowe devised fraudulent tactics to prevent MoviePass's heavy users from using the service, and falsely and misleadingly informed the public that usage had declined naturally or due to measures the company had employed to combat subscribers' purported violations of MoviePass's terms and conditions of service," the SEC said in its filing. Farnsworth was not immediately available for comment.
