LifeLock (LOCK) shares are tanking after the company disclosed late Friday that it is suspending its LifeLock Wallet mobile payment application.
Shares of the internet security company are currently down more than 17%.
LifeLock acquired the Wallet application as part of its $US42.6M deal for Lemon, which it announced in December.
In its filing, LifeLock also said it informed the FTC of its issues with Wallet, and the company expects to receive further requests from the Commission for information.
Today’s tumble comes on the heels of a tough quarter for LifeLock investors, as the stock was part of the group of internet-based momentum names that fell during March and April. Year-to-date, LifeLock is down more than 35%.
Since its February 13 all-time closing high of $US22.62, the stock is down more than 50%.
Despite recent weakness, LifeLock is till up better than 45% from where it debuted in October 2012.
Here’s the full statement from LifeLock:
We have determined that certain aspects of the Lemon Wallet (now called the LifeLock Wallet mobile application), which we acquired as part of our acquisition of Lemon, Inc., are not fully compliant with applicable payment card industry (PCI) security standards. As a result, we have temporarily suspended the Wallet mobile application, and are deleting the data (encrypted or otherwise) from our servers, until we can operate the Wallet mobile application in accordance with those standards. We have no indication that the data included in the Wallet mobile application servers was compromised. The Wallet mobile application storage processes are separate and independent from LifeLock’s core identity theft protection services business, including the enrollment and related credit card storage processes used in our standard LifeLock® service and our LifeLock Ultimate™ service. As such, we do not expect the suspension of the Wallet mobile application to impact in any manner the core functionality or utility of the identity theft protection services we provide to our members. Our consent order with the Federal Trade Commission (FTC) sets forth certain requirements for the security practices of LifeLock and all of its subsidiaries and for our representations to consumers about those practices. On May 15, 2014, on our own initiative, we informed the FTC Staff of these issues, and we expect to receive further requests for information from the FTC about these issues. It is possible that this PCI non-compliance of the Wallet mobile application could result in a determination by the FTC that we are not in full compliance with our FTC consent order.
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