(CNN) -- The New York Attorney General's Office is investigating the parent company of MoviePass, a source familiar with the probe confirmed to CNN Business.
The office is looking into whether Helios and Matheson mislead investors about its finances, the source said. The investigation is being conducted under New York's Martin Act, an anti-fraud and investor protection lawsuit.
The existence of the probe was first reported Wednesday by CNBC.
The movie subscription service exploded in popularity last year when it began offering customers the ability to watch as many movies in theaters as they wanted for $10 per month. But that business model proved unsustainable, and the company has since changed its subscription plans, pricing and movie availability.
At its all-time high in October 2017, Helios and Matheson stock was trading at nearly $39 a share. Since then, the stock price has cratered. This summer, when the stock was trading at 8 cents, the company approved a reverse split to boost the price 250-fold.
That failed, and shares are now trading at 2 cents.
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