Former MoviePass CEO, Mitch Lowe, has pleaded guilty to a securities fraud charge, admitting to conspiring to deceive the public and investors about the sustainability of the company's movie subscription service. The 72-year-old executive could face up to five years in federal prison, with the possibility of a reduced sentence through cooperation with prosecutors and regulators.

Lowe's attorneys, Margot Moss and David Oscar Markus, stated that he takes responsibility for his actions and is committed to making amends. His guilty plea comes as Ted Farnsworth, the former CEO of Helios and Matheson, the parent company of MoviePass, is scheduled to face trial on similar charges in March.

In 2022, Lowe and Farnsworth spearheaded the ill-fated all-you-can-watch offering by MoviePass, resulting in significant investor losses in 2017 and 2018. Investigators uncovered Lowe's attempt to mitigate the losses by implementing measures such as throttling the service and forcing high-volume users to reset passwords and verify tickets.

Charged with wire fraud and securities fraud in November 2022, Lowe's plea agreement reveals an estimated scheme loss of $303 million, although he contests the amount. Despite being out on bond, he is set to appear in court in Miami on March 21 for a status conference.

Lowe, who authored a memoir titled "Watch and Learn: How I Turned Hollywood Upside Down with Netflix, Redbox, and Moviepass" in 2022, awaits his sentencing date. Meanwhile, Farnsworth, 62, remains in federal custody since August 2023 when his bond was revoked after allegations of misusing company funds on a sex worker.

The allegations against Farnsworth include altercations with a former boyfriend, breaching restraining orders, and damaging property. Prosecutors claim that Farnsworth paid $147,000 to the man he met on an escort site, using company funds. Furthermore, he allegedly bought the man a Cadillac Escalade worth $144,000, again using company funds. Farnsworth falsely accused the man of stealing the vehicle upon their separation.

Additionally, Farnsworth reportedly failed to report these incidents to his probation officer and made unauthorized trips to Miami. Federal investigators also discovered wire transfers made to a sex worker during his extended stay in Miami in June 2023, where he frequented high-end clubs and indulged in luxury shopping sprees.

Farnsworth's lawyer requested a trial postponement, but the judge denied the request during his recent court appearance. No sentencing date has been set for Lowe, while Farnsworth's trial is set to proceed as scheduled in March.

These developments mark another chapter in the unraveling of MoviePass, once touted as a revolutionary service but now synonymous with financial pitfalls and legal troubles.