According to the law firm press release, LifeLock is a provider of proactive identity theft protection, providing its services to consumers and enterprises.
On March 8, 2010, the Federal Trade Commission ("FTC") filed a complaint against the Company and Defendant, alleging amongst other things, that the Company issued dramatically misleading advertisements and guarantees to customers regarding its identity theft protection services. Specifically, the March 8 Complaint alleged that the Company's aggressive advertising campaigns misled investors into believing that the Company provided certain services and benefits which in fact were not provided. The FTC further alleged that the Company misled consumers to believe that LifeLock's protection services, "provided complete protection against all forms of identity theft by making customers' personal information useless to identity thieves." In fact, the Company provided no real protection against identity theft.
As a result of its fraudulent advertising practices, in March 2010, the Company and Defendant entered into an settlement order (the, "Settlement Order") with the FTC whereby the Company settled allegations by the FTC that certain of the Company's advertising and marketing practices constituted deceptive acts or practices in violation of the FTC Act. The Settlement Order prohibited the Company from continuing to engage in these deceptive marketing practices.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company's marketing and advertising practices were in direct violation of applicable government rules and regulations; (ii) the Company was in direct violation of the Settlement Order; (iii) the Company's revenues were earned through violations of the FTC Act and the Settlement Order; and (iv) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On February 19, 2014, the Company announced that it had met with the FTC regarding its alleged non-compliance with the terms of the Settlement Order, after a whistleblower had discussed certain violations with the FTC. This announcement, which was not Filed in a Form 8-K or other press release by the Company, was first picked up by the market on Sunday, February 23, 2014, when a short seller from Seeking Alpha published an article entitled: "Lifelock: Pending FTC Investigation Revealed in 10-K".
On this news, the Company's shares fell more than $1.47 per share to $20.32, or over 6.00%, on February 24, 2014.
On June 16, 2014, the Court issued an Order consolidating actions, appointing lead plaintiff, and approving the selection of lead counsel. Lead Plaintiff filed a consolidated and amended complaint on August 15.
On January 16, 2015, a second consolidated and amended complaint was filed.
On July 21, 2015, the Court issued an Order dismissing this case with prejudice.