MoviePass Parent Company Facing Fraud Investigation
Helios and Matheson, the parent company of beleaguered film ticket service MoviePass, is reportedly under investigation for misleading investors.
CNBC reports New York Attorney General Barbara Underwood has launched an inquiry examining the company’s financial disclosures under the Martin Act, an anti-fraud law that’s considered among the strictest in the country. If Underwood finds instances of fraud, it could result in civil or criminal charges.
Helios and Matheson acknowledged the investigation in a statement, but denied any wrongdoing, saying “We are aware of the New York Attorney General’s inquiry and are fully cooperating. 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.”
The news is the latest in a series of hurdles for MoviePass. The company, which was lauded initially for letting subscribers attend as many movies as it wanted for a fixed price each month, lost favor when it reworked its business model, limiting customers to three films per month. That announcement came one week after MoviePass trended on Twitter for suffering an outage that restricted users’ access to some of the summer’s most popular hits, including Mission: Impossible—Fallout.
The news comes just two weeks after MoviePass announced it had received another $65 million in funding and indicated it was considering making acquisitions in the near future.