Why Lifelock Inc Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of LifeLock Inc  (NYSE: LOCK  ) were getting broken today, falling as much as 11%, and finishing down 7% after a pending Federal Trade Commission investigation was revealed over the weekend.

So what: The identity-theft protection service said in its 10-K filing that it had met with the FTC to discuss whistle-blower claims regarding its marketing practices. In a statement, the company said, "We believe we are in an environment in which there is increased regulatory scrutiny," and that it believes "there has been a recent increase in whistleblower claims made to regulatory agencies."

Now what: A regulatory investigation is never good news, but there's really not enough information in LifeLock's statement to gauge the seriousness of the whistle-blower claims. In 2010, LifeLock paid $12 million to settle charges from the FTC, so it is no stranger to regulatory action. To keep tabs on this developing story, you can add LifeLock to your Watchlist by clicking right here.

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