Ex-MoviePass CEO Pleads Guilty To Defrauding Investors; DOJ Calls Case Early Instance Of “AI Washing”

Theodore Farnsworth, the former CEO of MoviePass parent Helios & Matheson Analytics, pleaded guilty to charges of defrauding and conspiring to defraud investors in two public companies, including lying about artificial intelligence capabilities that it didn’t have.

The company is now owned and run by original founder Stacy Spikes, who acquired it out of bankruptcy in 2022 after Farnsworth and partner Mitch Lowe ran it to the ground, wiping out shareholders.

Farnswoth entered the plea in the Southern District of Florida. Related Stories Festivals CEO Says MoviePass Will Test Ads On Its Platform, Offer Cheaper Tickets To Users Who Watch Them News MoviePass Is Back; Julia Louis-Dreyfus Stars In 'You Hurt My Feelings' - Specialty Preview

According to the Department of Justice, the executive and and co-conspirators made materially false and misleading representations relating the Helios & Matheson and MoviePass business and operations from August 2017 through March 2019 to artificially inflate Helios stock and attract new investors. Farnsworth, chairman and CEO at the time, “repeatedly lied to the public to artificially inflate these companies’ stock prices, defraud investors, and enrich himself and his co-conspirators,” said Principal Deputy Assistant Attorney General Brent S. Wible, head of the Justice Department’s Criminal Division. Watch on Deadline

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