In a federal court today, Theodore Farnsworth, former CEO of Helios & Matheson Analytics (the company that oversees MoviePass), admitted to deceiving investors. As reported by Deadline, Farnsworth confessed to defrauding and conspiring to deceive investors in two publicly traded companies: MoviePass and Vinco Ventures. He also admitted to falsifying information about the capabilities of AI.
The Deputy Assistant Attorney General Brent S. Wible stated that Farnsworth knowingly deceived the public, which in turn boosted the value of these companies’ shares fraudulently and swindled investors while personally gaining wealth and that of his accomplices. It is alleged that from August 2017 to March 2019, Farnsworth and his associates manipulated Helios’ stock price artificially.
Additionally, the DOJ alleges that the ex-CEO of MoviePass deceived consumers by exaggerating their use of artificial intelligence, claiming it could perform tasks beyond what was actually possible. According to Wible, Farnsworth failed to disclose that MoviePass’ subscription service was a financial trick and falsely asserted that HMNY utilized artificial intelligence to generate revenue from MoviePass user data, among other dishonest practices.
It appeared that MoviePass’ promise of an all-access movie subscription for $9.95 per month was too good to pass up. However, as it turned out, this claim proved to be overly optimistic. Farnsworth asserted the model had been tested and could sustain itself financially, but in reality, he knew the plan would lead to financial losses. Additionally, MoviePass claimed they could generate revenue by utilizing “big data” from their subscribers, but this was nothing more than a misleading statement. Farnsworth now faces up to 20 years in prison for securities fraud, and an additional five years for conspiring to commit fraud. A sentencing date has yet to be determined.
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2025-01-09 03:53