AMC CEO Adam Aron says he was targeted in a blackmail attempt

By James Rogers

The blackmail attempt involved false allegations about the AMC CEO's private life, according to Aron

AMC Entertainment Holdings Inc. Chief Executive Adam Aron was targeted in a blackmail attempt last year, he has revealed.

"Unfortunately, last year I became the victim of an elaborate criminal extortion by a third party who was unknown to me related to false allegations about my personal life," he tweeted early Thursday. "Rather than give in to blackmail, I personally engaged counsel and other professional advisors and reported the matter to law enforcement."

"A vigorous federal criminal investigation ensued which resulted in the extortionist being arrested, convicted of a felony, and spending nearly a year in jail," he added. "At the time of the arrest, the U.S. Attorney for the Southern District of New York commended my having reported the matter to the FBI and the U.S. Department of Justice."

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Aron said he was asked by law enforcement to keep the matter confidential during their investigation and subsequent court case. "Shortly after the extortionist's July 2023 sentencing, I informed AMC's Board of Directors which thoroughly reviewed these events with independent outside counsel at WilmerHale."

The AMC CEO (AMC) said this was a personal matter, which is now closed.

Citing a 2022 federal indictment of a Bronx woman, website Semafor reported that Aron was the victim of a catfishing scam. The woman attempted to extort hundreds of thousands of dollars from the AMC CEO using fake identities, according to the report, which said that Aron sent sexually explicit images and messages in a weeks-long text exchange. When the catfishing attempt began in March 2022, the woman sent Aron photos of a Russian model, whom he reportedly mistook for someone he'd had a prior relationship with.

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"The Board retained independent counsel, WilmerHale, to look into the incident," said AMC's board of directors, in a statement provided to MarketWatch. "The Board determined it was a personal matter, and considers the issue resolved."

Shares of the movie-theater chain and meme-stock darling rose 1% Thursday, after ending Wednesday's session up 5%.

Aron, who has led the theater chain since 2016, is a keen user of Twitter to connect with the retail investors who turned AMC into a meme-stock phenomenon. A fan of memes and quirky tweets, Aron has racked up more than 303,000 followers on the platform.

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The AMC chief is the former CEO of Starwood Hotels & Resorts, Norwegian Cruise Line Holdings Ltd. (NCLH), Vail Resorts Inc. (MTN) and the Philadelphia 76ers.

The movie-theater chain has been on a roller-coaster ride over the past few years that took it from a beleaguered pandemic victim to meme-stock phenomenon. AMC used the steep rise in its share price to tap into equity and debt markets, raising $917 million in January 2021.

In recent months, Aron has overseen a $325.5 million AMC equity offering, a 1-for-10 reverse stock split and a conversion of AMC Preferred Equity units to common stock.

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AMC's stock has fallen 70.8% in 2023, compared with the S&P 500 index's SPX gain of 13.9%.

-James Rogers

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10-12-23 1048ET

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