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Ex-MoviePass CEO Pleads Guilty To Defrauding Investors; DOJ Calls Case Early Instance Of “AI Washing”
Theodore Farnsworth, former CEO of MoviePass parent Helios & Matheson, pleaded guilty to charges of defrauding and conspiring to defraud 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. “Theodore Farnsworth’s plans and promises for MoviePass seemed too good to be true — they were in fact part of a securities fraud scheme,” said Assistant Director in Charge James E. Dennehy of the FBI New York Field Office. Additionally, Farnsworth falsely claimed that MoviePass’ cost of goods, as reflected in the number of tickets each subscriber purchased using their subscription, was naturally declining over time consistent with publicly stated expectations.
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