Lifelock Shares Plummet Following Alleged FTC Violations
Shares of Lifelock Inc (NYSE: LOCK) were halted for the second time on Tuesday afternoon, and are down more than 37 percent on the day.
The catalyst for the drop is news from the Federal Trade Commission that Lifelock "allegedly violating 2010 order; company failed to institute info security program." Shares were halted at 2:19 p.m. ET, last trading at $10.00.
— Edith Ramirez (@EdithRamirezFTC) July 21, 2015
Lifelock is an identify theft protection company specializing in ID and credit fraud.
According to the FTC, the company "violated a 2010 settlement with the agency and 35 state attorneys general by continuing to make deceptive claims about its identity theft protection services, and by failing to take steps required to protect its users’ data."
The settlement came from previous FTC allegations that LifeLock used false claims to promote its identity theft protection services, which:
- "Barred the company and its principals from making any further deceptive claims;
- "Required LifeLock to take more stringent measures to safeguard the personal information it collects from customers;
- "Required LifeLock to pay $12 million for consumer refunds."
Lifelock came out with a statement, saying, "After more than 18 months of cooperation and dialogue with the FTC, it became clear to us that we could not come to a satisfactory resolution of their issues outside a court of law. We disagree with the substance of the FTC's contentions and are prepared to take our case to court."
Shares resumed trading at 2:47 p.m. ET at $10.46.
Shares of Lifelock closed Monday at $16.06, and the stock was down 13 percent year-to-date. The company went public in October 2012 and had returned more than 119 percent as of Monday's closing price.
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