Zoom Video Communications, Inc. Securities Class Action Lawsuit
- Company Name
- Zoom Video Communications, Inc.
- Stock Symbol
- Class Period
- April 18, 2019 to April 6, 2020
- Northern District of California
The Zoom Video Communications, Inc. securities class action lawsuit charges Zoom and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Zoom securities between April 18, 2019 and April 6, 2020 (the “Class Period”). The Zoom securities class action lawsuit was commenced on April 7, 2020 in the Northern District of California on behalf of and is captioned Drieu v. Zoom Video Communications, Inc., No. 5:20-cv-02353.
Zoom provides a video communications platform application that allows users to interact with each other primarily in the Americas, the Asia Pacific region, Europe, the Middle East, and Africa. Zoom’s cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting.
The Zoom securities class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose that: (i) Zoom had inadequate data privacy and security measures; (ii) contrary to Zoom’s assertions, Zoom’s video communications service was not end-to-end encrypted; (iii) as a result, users of Zoom’s communications services were at an increased risk of having their personal information accessed by unauthorized parties, including Facebook; and (iv) usage of Zoom’s video communications services was foreseeably likely to decline when these facts came to light. As result of this information being withheld from the market, Zoom securities traded at artificially inflated prices during the Class Period, with the price of Zoom’s stock reaching a high of more than $159 per share.
The truth about the deficiencies in Zoom’s software encryption began to come to light as early as July 2019. However, due in large part to Zoom’s obfuscation, it was not until the COVID-19 pandemic in March and April of 2020, with businesses and other organizations increasingly relying on Zoom’s video communications software to facilitate remote work activity during government shelter-in-place orders, that the truth was more fully disclosed.
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