Ted Farnsworth, the former architect of MoviePass’s $9.95-a-month subscription model, has pleaded guilty to defrauding investors associated with the company. This plea was part of a broader investigation into his actions related to MoviePass and a second scheme linked to a failed video-sharing platform, which he allegedly organized while under investigation for the initial scandal.
Farnsworth, who is 62 years old, has been in federal custody since August 2023 when his bail was revoked. His attorney stated that Farnsworth had taken a significant step towards accountability by entering the guilty plea. He was indicted in November 2022 for misleading investors about MoviePass’s revenue sources and overall sustainability.
In December 2022, Farnsworth reached a settlement in a civil lawsuit initiated by the Securities and Exchange Commission (SEC), wherein he was banned from serving as a director of publicly traded companies. MoviePass, which grew rapidly after its 2017 launch, garnered around three million subscribers but ultimately declared bankruptcy in 2020 after incurring substantial losses.
Farnsworth was the CEO of Helios & Matheson Analytics, the parent company of MoviePass. Another executive from MoviePass, Mitchell Rowe, also pleaded guilty to similar charges in September. Despite the unsustainable financial model of the company, both Farnsworth and Rowe claimed in 2017 that leveraging customer data would lead to potential benefits.
Originally facing three counts of securities fraud and wire fraud, Farnsworth was recently charged with additional counts related to conspiracy to commit securities fraud. This latest charge concerns another company, Vinco Ventures, where he allegedly raised $120 million between 2021 and 2023 while secretly controlling the firm, profiting millions through this scheme.
Farnsworth’s bail was revoked after allegations surfaced regarding his inappropriate use of company funds to pay individuals he met on an escort site. After bankruptcy, MoviePass has since relaunched under new ownership and a revised business strategy.