The legal action, filed in the United States District Court for the District of New Jersey, centers on allegations that Alarum Technologies misled shareholders regarding its business operations. According to the complaint, the company failed to disclose that its NetNut subsidiary allegedly integrated customer home internet devices into a network without consent. This practice purportedly allowed cybercriminals to mask their locations, significantly increasing the firm’s legal exposure.

The situation escalated on July 2, 2026, when the company confirmed that the FBI had seized domains associated with NetNut. By the following day, additional seizures were announced, forcing the company to admit that these developments were disrupting services and threatening its financial standing. The firm has since launched an investigation into whether its infrastructure was utilized for unlawful activities. Following these disclosures, Alarum’s stock price plummeted from $8.02 on July 1 to $3.08 by July 6, 2026. Wolf Haldenstein Adler Freeman & Herz LLP is currently representing affected shareholders in the litigation.