Shares of cybersecurity company Lifelock plunged 40% in trading on Tuesday after the Federal Trade Commission said the company violated a settlement it made five years ago.
The stock is now halted.
In a statement Tuesday, the FTC said: “In documents filed with the U.S. District Court for the District of Arizona, the FTC charged that LifeLock failed to live up to its obligations under the 2010 settlement, and asked the court to impose an order requiring LifeLock to provide full redress to all consumers affected by the company’s order violations.”
The FTC had alleged that Lifelock promoted its services by making false claims, and said it did not have a strong security program to guard its customers’ data while exaggerating the extent of protections it offered.
In trading on Tuesday, the stock fell to around $US10 per share — a two-year low.
Here’s a chart showing the plunge:
More to come …