Market Overview

Uh Oh, There's More: Lifelock Has A New SEC Problem

Uh Oh, There's More: Lifelock Has A New SEC Problem
  • Shares of Lifelock Inc (NYSE: LOCK) plunged nearly 50 percent on July 21 following a report of possible FTC action.
  • Probes Reporter is reporting the company now faces an SEC investigation.
  • Probes Reporter added it is possible the SEC probe could involve something "wholly unrelated" to the FTC probe.

Shares of Lifelock plunged nearly 50 percent on July 21 as investors and traders reacted to a Federal Trade Commission report that the company allegedly violated a 2010 settlement and made deceptive claims about its identity theft protection services.

Lifelock responded to the FTC's claim, noting that it has been cooperating with the agency and will defend itself in court accordingly.

Probes Reporter, an independent investment research firm that focuses on public company interactions with the SEC, stated in a report on Tuesday that Lifelock is also subject of an SEC investigation.

Probes Reporter noted that it received a letter from the SEC on August 27, 2015, which suggested Lifelock is involved in an unspecific SEC investigation. The report further added that they found no disclosure from the company. In another letter dated September 8, 2015, the SEC has confirmed Lifelock's involving in an ongoing enforcing proceedings that remain undisclosed as of this date.

"Given all the recent data breaches of late, the SEC has grown particularly sensitive to public companies experiencing something related," Probes Reporter stated in its report. "Therefore, we think it highly possible the SEC initiated an investigation of LifeLock after the story broke about the FTC accusations. Of course, the FTC could have made a referral to the SEC."

However, Probes Reporter added that it is also possible the SEC investigation could stem from "something wholly unrelated" to the FTC probe. If this is indeed the case, it "might concerns investors even more" as the SEC is doing a "tag-along" to the FTC.


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Posted-In: FTC Probe Probes Reporter SEC InvestigationNews Legal Tech Best of Benzinga

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