- The former chairman of Vinco Ventures pleaded guilty to conspiracy to commit securities fraud.
- The DOJ charged Roderick Vanderbilt with lying to investors and artificially inflating Vinco's stock.
- Vinco tried and failed to popularize a TikTok rival.
The former chairman of Vinco Ventures, which tried and failed to popularize a TikTok rival, pleaded guilty to conspiring to commit securities fraud.
Roderick Vanderbilt was Vinco's chairman during a tumultuous period at the company. Its stock swung wildly on a string of splashy announcements — including plans to buy the National Enquirer — that failed to live up to their hype. Vinco's stock eventually collapsed, and it was delisted from the Nasdaq exchange in 2023.
During a hearing on Friday, Vanderbilt pleaded guilty to a conspiracy charge and admitted to making misleading statements about Vinco, Law360 reported. He also said he hid the involvement of Ted Farnsworth, who previously ran the former owner of movie ticket service MoviePass, and with whom he had a romantic relationship.
In 2024, a Business Insider investigation chronicled how Vinco's rise and fall followed a pattern similar to that of some other Farnsworth ventures, including MoviePass.
Farnsworth previously pleaded guilty to defrauding investors in MoviePass' parent company, Helios and Matheson Analytics, from 2017 to 2019. The Department of Justice charged Farnsworth and others with conspiracy for using "the same strategy to defraud" investors in Vinco, which he also pleaded guilty to.
"I did everything Ted asked me to do and never questioned him," Vanderbilt said during the Friday hearing, Law360 reported. "I concealed my relationship with Ted from the board and shareholders and allowed others to use my signature, not telling investors and the public that the company was failing even though I knew it was."
The docket entry for the scheduled hearing for a plea change is sealed. Vanderbilt's lawyer did not return a request for comment from Business Insider.
In 2021, Vinco announced plans to merge with Zash Global Media and Entertainment, which Farnsworth and Vanderbilt cofounded. Vanderbilt joined Vinco's board as chairman later that year, while Farnsworth ran Zash and briefly served as Vinco's CEO, according to court documents.
Under their helm, Vinco acquired a short-video app called Lomotif, which Farnsworth hyped as a "TikTok killer."
Retail investors flocked to these and other announcements. But, behind the scenes, company insiders previously described to BI a company on the verge of collapse.
The Department of Justice alleged in court documents that Vanderbilt and Farnsworth made "materially false and misleading representations relating to the businesses and operations of Vinco Ventures to artificially inflate the price of its stock and increase the volume of Vinco Ventures shares traded," from around November 2020 to September 2024.
