Mitch Rowe, one of two MoviePass leaders indicted by the Department of Justice in 2022, pleaded guilty to securities fraud. The former CEO admitted to conspiring to mislead the public and investors about the service’s sustainability. Variety reports that details of Rowe’s plea agreement have not been made public.
Prosecutors allege that Lowe knew from the beginning that the company’s $9.95 “unlimited” plan was a short-term gimmick to attract subscribers and inflate the stock price. He is also accused of making false statements about MoviePass’s long-term viability in press releases, interviews and SEC filings.
Those statements included allegedly lying about the company’s ability to make money from subscription fees alone and about having the technology to generate revenue from customer data. He also claimed MoviePass makes money from multiple revenue streams, despite the fact that it has no revenue outside of subscriptions.
Prosecutors also accused Lowe and Ted Farnsworth, the former CEO of MoviePass’ parent company, Helios & Matheson, of denying subscribers what they were promised from their “unlimited” subscriptions. The company settled with the FTC in 2021 over allegations that it knowingly disabled subscribers’ passwords and froze their accounts, preventing them from getting the movie tickets the service promised. MoviePass and its parent company declared bankruptcy in 2020.
No sentencing date has been set, but Rowe is free on bail and is scheduled for a status conference trial in Miami in March 2025. The 72-year-old former business executive faces up to five years in federal prison.
“Mitch is a good person who is trying to move forward with his life,” Rowe’s lawyers, Margot Moss and David Oscar Marcus, said in a statement to Variety. “He accepts responsibility for his actions in this matter and will continue to work to make things right.”
Meanwhile, Farnsworth remains in custody. He was initially released on $1 million bail, but his bail was revoked in August 2023 after federal authorities accused him of misusing approximately $300,000 in company funds. Farnsworth paid $147,000 to his ex-girlfriend, whom he met on an escort site, and gave her a Cadillac worth $144,000. After the two broke up, federal authorities say Farnsworth falsely accused her of stealing the car.
