LifeLock stock plunges 49% on FTC claims

Lifelock: We disagree with FTC's contentions
Lifelock: We disagree with FTC's contentions

LifeLock shares were battered on Tuesday afternoon after the Federal Trade Commission claimed the company violated the terms of a 2010 settlement over deceptive advertising.

After two separate trading halts, the stock resumed trading around 2:45 p.m. ET. It closed 49 percent lower.

FTC Ramirez's tweet

The 2010 order alleges LifeLock used false claims about its identity theft protection services. In court documents filed in Arizona on Tuesday, the FTC alleges LifeLock did not meet the obligations of its settlement and asks the company to compensate affected customers.

Shares of LifeLock stock were halted twice today on FTC claims.

The FTC charged that LifeLock failed to establish a "comprehensive" security program to safeguard information such as credit card and Social Security numbers while advertising that it guarded consumer data with top-notch security. The FTC claims LifeLock did not meet the 2010 settlement's requirements for keeping records.

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In a statement, LifeLock said it disagrees with the FTC's claims and is "prepared to take our case to court."

"Security of our systems has always been, and will remain, of primary importance to us. Based on the evidence, we do not believe that anything the FTC is alleging has resulted in any member's data being taken. As required by the FTC's consent order in 2010, LifeLock hired highly credentialed, independent professionals to assess its information security," the company said.

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Under the original deal, LifeLock had to pay $12 million to refund customers and had to take "more stringent measures" to secure user data.