Contact Us

MoviePass under investigation for fraud by NY Attorney General

Movie Pass

When we last checked in with the beleaguered MoviePass in August, the service was hemorrhaging users, having begun to limit them to up to six sometimes unknown movie choices per day of the three allotted each month. Parent company Helios and Matheson now has even more troubles, as CNBC reports that “according to a person familiar with the matter,” New York Attorney General Barbara Underwood is investigating them for fraud. From CNBC:

The attorney general’s office is investigating whether the company misled the investment community regarding the company’s financials, said the person. The investigation is in the early stages.

The attorney general is using the Martin Act, a statute designed to protect New York investors and the integrity of the financial markets from fraud.

“We are aware of the New York Attorney General’s inquiry and are fully cooperating,” Helios and Matheson said in a statement to CNBC. “We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General.”

Helios and Matheson are also facing a lawsuit filed by shareholder Jeffrey Braxton, Deadline reports. Braxton is seeking class action status for his suit, which alleges that “investors suffered losses because they were misled about the company’s business and its prospects.” It further argues, “MoviePass’ business model was not sustainable because there was no reasonable basis to believe MoviePass could monetize the model to a degree that could be maintained before being too buried in debt to survive.”

The once wildly popular, too-good-too-last MoviePass has been operating at a big loss for over six months, and stocks are down to two cents per share.

Check It Out

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

It appears that you already have an account on this site associated with . To connect your existing account just click on the account activation button below. You will maintain your existing VIP profile. After you do this, you will be able to always log in to http://www.brooklynvegan.com using your original account information.

Please fill out the information below to help us provide you a better experience.

(Forgot your password?)

Not a member? Sign up here

Sign up for BrooklynVegan quickly by connecting your Facebook account. It's just as secure and no password to remember!