MoviePass' parent company under investigation by New York State

The New York attorney general has launched an investigation into the parent company of the embattled movie subscription service MoviePass, Helios and Matheson Analytics, the company has confirmed. The state's AG, Barbara Underwood, is looking into whether the company misled investors.

Helios and Matheson denied that it did so, and said it was "fully cooperating" with the inquiry. "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," the company said in an emailed statement.

MoviePass, which charges members $9.95 a month to see up to three movies, has faced questions about its long-term viability. The service pays movie theaters the face value of their tickets, which means it relies on people not seeing movies in months they've paid for, much like a gym membership works. So far, that hasn't happened. MoviePass imposed the three-movie limit in August after trying to raise the monthly fee and introduce surcharges for peak showtimes—both of which failed after widespread user outcry.

Shares of Helios and Matheson, which traded above $100 in June, have dropped to 2 cents in recent days.