New York attorney general investigating whether MoviePass may have misled investors

The troubling year for the cash-strapped subscription-based movie ticketing service Moviepass just got worse.

New York Attorney General Barbara Underwood has opened a probe into the parent company of MoviePass, Helios and Matheson, a source familiar with the investigation told Paste BN. The source was not authorized to speak publicly about an ongoing investigation, and wished to remain anonymous. 

The office of the attorney general opened the probe citing the Martin Act, a New York anti-fraud law often used to litigate issues related to securities trading. Under that statute, the AG's office can file a civil suit and/or criminal charges.  

The attorney general's office is looking into whether or not MoviePass has misled its investors, the source said. The case is still in its early stages and no charges have been filed. 

Helios said in an email, "We are aware of the New York Attorney General’s inquiry and are fully cooperating with it. We believe our public disclosures have been complete, timely and truthful and we have not misled investors."

The report comes on the heels of the company's decision to postpone a special meeting of stockholders regarding a potential reverse stock-split vote. MoviePass' parent company said in its SEC filing on Tuesday that it was pushing the vote back until November 1. It was originally scheduled for Thursday. 

Helios and Matheson stock trades on the Nasdaq for about 2 cents a share. Shares fell 5 percent in extended trading on Wednesday. 

Follow Dalvin Brown on Twitter @Dalvin_Brown

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