Security firm faces lawsuit with stock tanking tactic
One security firm’s controversial approach to pointing out flaws in products is facing legal action. On Wednesday, the firm MedSec was hit with a lawsuit after trying to tank a company’s stock.
The company, St. Jude Medical, has filed the legal action against MedSec for making false accusations about its products and for conspiring to manipulate its stock.
Two weeks ago, MedSec ignited an ethical firestorm when it publicized allegations that pacemakers and other devices from St. Jude Medical were insecure and open to hacks.
Pointing out flaws is nothing new in the security industry. But MedSec took the unusual step of trying to profit from the research by betting against St. Jude Medical. To do so, it partnered with investment firm Muddy Waters Capital to short the stock.