Miami-based MoviePass parent company under investigation, according to reports

The parent company of popular movie subscription site MoviePass is under investigation by the New York Attorney General’s office, according to multiple reports.

Citing unnamed sources, CNBC and Bloomberg report Miami- and New York-based company Helios and Matheson may have misled investors about its financial standing. Both media outlets say the attorney general is looking into violations of New York’s Martin Act, which grants the state wide authority to prosecute fraud.

Publicly traded Helios reported a loss of $100 million in August, saying it would soon run out of money if it could not raise additional funds. Earlier this month, CEO Ted Farnsworth said the company had raised an additional $65 million.

Farnsworth did not respond to a request for comment. The Miami Herald reported in June that Farnsworth, a Miami resident, has repeatedly been sued for breach of contract and experienced numerous business failures.

“We are aware of the New York Attorney General’s inquiry and are fully cooperating,” Helios said in a statement. “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.”

Helios shares have lost close to 99 percent of their value over the past year, and now trade at around $0.02. The company is currently proposing a stock split to current investors in a bid to raise more cash.

MoviePass lets new users see three movies a month at participating theaters for $9.95 a month. The company currently claims more than 3 million subscribers.

This story was originally published October 17, 2018 at 6:37 PM.