Mitch Lowe, one of two MoviePass leaders indicted by the Justice Department in 2022, has pleaded guilty to securities fraud charges, admitting to conspiring to deceive the public and investors about the service’s sustainability. Variety reports that the details of Lowe’s plea agreement haven’t been made public. Prosecutors claim Lowe knew from the start that the company’s $9.95 “unlimited” plan was a short-term gimmick to attract subscribers and inflate stock. He’s also accused of making false statements in press releases, interviews and SEC filings about MoviePass’ long-term viability, including lying about the company’s ability to become profitable on subscription fees alone and having tech that could generate revenue from customer data. Prosecutors also accused Lowe and Ted Farnsworth, former CEO of MoviePass’ parent company, of preventing subscribers from getting what was promised from the “unlimited” subscription. MoviePass settled with the FTC in 2021 over allegations that it intentionally invalidated subscriber passwords. Although no sentencing date has been set, Lowe faces a maximum of five years in federal prison and his attorneys stated he is looking to make things right. Meanwhile, Farnsworth, who is still in custody, was accused in 2023 of misusing nearly $300,000 in company funds and engaging in a scandal with his former boyfriend.
