Using the broad Martin Act, the New York state securities statute, the New York Attorney General is investigating whether MoviePass misled investors regarding its financial situation.
MoviePass is the wildly popular movie subscription service that has been changing its business model as it has bled cash over the past few months.
The subscription model has now been copied by the exhibitor chains as well, for example, with the AMC Stubs A-List going for $19.95 per month giving you access to 3 movies a week.
The Cinemark chain and Sinemia, founded in Turkey, also compete.
MoviePass’ company is Helios and Matheson, a (barely) public company whose stock recently traded for about 2 cents per share.
If the New York Attorney General is on the case, it’s probably a matter of time before the Securities and Exchange Commission gets involved (if it’s not already since they do not comment on open investigations).