SEC accuses former MoviePass executives of fraud

When MoviePass first launched, giving people a chance to pay a fixed monthly fee for endless movie tickets, it seemed too good to be true. That was eventually, of course, with “endless movies” eventually becoming “a couple of predetermined movies and only at certain times” when the company started bleeding money, and then the company died. However, according to the Securities And Exchange Commission, some of the company’s founders made it “too good to be true” on purpose and knew it was only a matter of time before the company imploded, while continuing to make money from it. The SEC calls it “fraud.”

This comes from Variety, which says former MoviePass executives Theodore Farnsworth and Mitch Lowe knew MoviePass couldn’t survive on its $10 plan, and when things started going bad, they instituted “fraudulent methods” to avoid losing more money. These methods reportedly included blocking access to “six Bollywood movies” that Lowe reportedly said “killed us financially” and the introduction of “Project 2%” – where the biggest MoviePass users were specifically targeted by the company to have their accounts sandbagged “password interruption” and “ticket verification.”

And if that sounds familiar, that’s because we heard a while ago that the FTC was angry about MoviePass using secret little tricks to stop people from using the service. The SEC complaint also charges a MoviePass executive using MoviePass money for his own personal use, which is bad in another way.

All of this comes as original MoviePass creator Stacy Spikes is relaunch of MoviePass with a new business model that entails new and more expensive floor plans as well as “credits” used to buy tickets. Spikes also mentioned integration with an extremely dodgy advertising system that will track your eyes to make sure you’re actually looking at ads, but… the world doesn’t need that to become a popular thing.