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MoviePass parent under investigation for allegedly misleading investors

New York Attorney General Barbara Underwood is conducting the probe under the state's anti-fraud act.

moviepass
MoviePass

New York Attorney General Barbara Underwood has launched a probe into MoviePass' parent company for allegedly misleading investors, a person familiar with the matter said on Wednesday.

Underwood's office is looking into whether Helios and Matheson, an information technology company that owns more than 90 percent of MoviePass, misled investors about its financial situation. The investigation is being conducted under New York's Martin Act, which is designed to protect investors from fraud. 

MoviePass has been changing its subscription plans -- limiting the number of movies customers can watch and briefly raising prices -- as its parent company battles huge losses. Helios and Matheson lost more than $100 million in the quarter ended June 30.

In a statement, Helios and Matheson said it's "fully cooperating" with Underwood's inquiry.  

"We believe our public disclosures have been complete, timely and truthful and we have not misled investors," the company said. "We look forward to the opportunity to demonstrate that to the New York Attorney General."

First published Oct. 17 at 3:38 p.m. PT.
Update, 3:56 p.m.: Adds comment from Helios and Matheson.