This year, I introduced a weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions last year when compiling my list of the worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week, I want to take a closer look at recent IPO LifeLock (LOCK) and its CEO, Todd Davis.

The dunce cap
If the LifeLock name sounds familiar, that's because you've probably seen one of the company's advertisements over the years. Known famously for its commercials and print ads where LifeLock CEO Todd Davis publicly displays his Social Security number, LifeLock claims it can prevent fraudulent activity (i.e., people opening accounts in your name, or using your credit card without authorization) before it even happens.

The problem with this assessment is that LifeLock's plan isn't foolproof, as The New York Times discovered when it took a closer look at the company in 2008. According to data available from the Federal Trade Commission in 2005, only 0.8% of all people fell victim to new account fraud. That small figure doesn't leave much wiggle room for LifeLock to acquire customers, so it's needed to use aggressive and shock advertising to lure in those users who are "on the fence."

This shock-and-awe advertising has had numerous negative effects. For one, as reported by the Times, a man in Texas did successfully use Todd Davis' Social Security number to take out a payday loan. Needless to say, that didn't help LifeLock's reputation. In addition, multiple states have taken legal action against LifeLock for deceptive or fraudulent business practices, including Oklahoma and New York, as well as credit bureau Experian (EXPN -1.13%). In 2010, LifeLock paid $12 million to settle claims of deceptive marketing practices that the FTC brought against it .

What's particularly noteworthy is that Davis has really ramped up LifeLock's advertising campaign to boost its retention rate (which is a record 85.4%), but it's come with a nasty side effect: rapidly rising customer acquisition costs, or CAC. Through the first six months of the year, CAC were $157 per member, yet the company brought in only $9 per month in revenue from each member. No need to grab your calculator, folks; that's a full 18-month timeframe before LifeLock will recoup its costs! Yikes! Furthermore, LifeLock added fewer new customers in the second quarter than it did in the first quarter, although advertising was ramped up in the second quarter.

To the corner, Mr. Davis
Aside from numerous advertising goofs over the years, LifeLock's recent debut on the NYSE is also cause for alarm. Primarily underwritten by Goldman Sachs (GS -0.71%), LifeLock and Goldman priced the 15.5 million shares offering at just $9 -- well below the $9.50 to $11.50 the company had originally hoped to price at. Since the offering, shares have fallen almost precipitously and currently sit at $7.

Davis' actions simply haven't translated into tangible profits for LifeLock as of yet, and a lowered offering price isn't helping its cause one bit. Until I see CAC drop to a more reasonable level and the company offer a truly revolutionary product, I don't see myself buying into Todd Davis' vision.

Do you have a CEO you'd like to nominate for this dubious honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may see your suggestion in the spotlight.

While it's still yet to be determined if LifeLock's business model has long-term potential, these three selections by our analysts at Stock Advisor have "help you retire rich" potential written all over them. Find out the identity of these stocks, for free, by clicking here to get your copy of this latest report.

Editor's note: A previous version of this article erroneously noted that Todd Davis sold additional shares following LifeLock's IPO. The Fool regrets the error.