Zoom Video Communications, Inc. (ZM)


Faruqi & Faruqi, LLP Encourages Investors Who Suffered Losses Exceeding $50,000 In Zoom Video Communications, Inc. To Contact The Firm 

Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Zoom Video Communications, Inc. (“Zoom” or the “Company”) (NASDAQ:ZM) of the June 8, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company. 

If you invested in Zoom stock or options between April 18, 2019 and April 6, 2020 and would like to discuss your legal rights, please fill out the form below. There is no cost or obligation to you. You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to rgonnello@faruqilaw.com.  

The lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of all those who purchased Zoom securities between April 18, 2019 and April 6, 2020 (the “Class Period”).  The case, Drieu v. Zoom Video Communications, Inc. et al., No. 5:20-cv-02353 was filed on April 7, 2020.

The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) Zoom had inadequate data privacy and security measures; (2) contrary to Zoom’s assertions, the Company’s video communications service was not end-to-end encrypted; (3) as a result of all the foregoing, users of Zoom’s communications services were at an increased risk of having their personal information accessed by unauthorized parties, including Facebook; (4) usage of the Company’s video communications services was foreseeably likely to decline when the foregoing facts came to light; and (5) as a result, the Company’s public statements were materially false and misleading at all relevant times.
 
On July 8, 2019, during intraday trading hours, security researcher Jonathan Leitschuh linked an article published by him that day to his Twitter account, which allegedly exposed a flaw allowing hackers to take over Zoom webcams. According to the article, “[a] vulnerability in the Mac Zoom Client allows any malicious website to enable your camera without your permission,” and “[t]he flaw potentially exposes up to 750,000 companies around the world that use Zoom to conduct day-to-day business.”
On this news, the Company's stock price fell from $91.88 per share on July 5, 2019 to $90.76 per share on July 8, 2019: a $1.12 or 1.22% drop. 

Then, on July 11, 2019, public interest research center the Electronic Privacy Information Center filed a complaint against Zoom before the U.S. Federal Trade. Commission (“FTC”), alleging that the Company “placed at risk the privacy and security of the users of its services,” that “Zoom intentionally designed their web conferencing service to bypass browser security settings and remotely enable a user’s web camera without the consent of the user,” and that, “[a]s a result, Zoom exposed users to the risk of remote surveillance, unwanted videocalls, and denial-of-service attacks.” The complaint also alleged that “[w]hen informed of the vulnerabilities Zoom did not act until the risks were made public, several months after the matter was brought to the company’s attention,” that “Zoom exposed its users to a wide range of harms, many of which are ongoing,” and that the Company’s “business practices amount to unfair and deceptive practices under Section 5 of the FTC Act, subject to investigation and injunction by the [FTC].”

On this news, Zoom’s stock fell $1.32 per share, or 1.42%, to close at $91.40 per share on July 11, 2019.

On March 26, 2020—in the midst of the COVID-19 pandemic and shelter-in-place orders from multiple national and local governments, as businesses increasingly turned to Zoom’s video communication software to facilitate remote work activity —Motherboard, Vice Media’s technology news subsegment, reported that Zoom’s “privacy policy do[es] [not] make clear . . . that the iOS version of the Zoom app is sending some analytics data to Facebook, even if Zoom users don’t have a Facebook account,” and that “Zoom is not forthcoming with the data collection or the transfer of it to Facebook.”

Then, on March 27, 2020, Zoom issued a statement by Defendant Yuan, disclosing “a change that [Defendants] have made regarding the use of Facebook’s SDK” after being “made aware on Wednesday, March 25, 2020, that the Facebook SDK was collecting device information unnecessary for us to provide our services.” Yuan admitted that “[t]he information collected by the Facebook SDK did not include information and activities related to meetings such as attendees, names, notes, etc., but rather included information about devices such as the mobile OS type and version, the device time zone, device OS, device model and carrier, screen size, processor cores, and disk space,” and that, “therefore [Defendants] decided to remove the Facebook SDK in [the] iOS client and have reconfigured the feature so that users will still be able to log in with Facebook via their browser.” 

The next trading day, on March 30, 2020, the New York Times reported that Zoom is under scrutiny by the office of New York State Attorney General, Letitia James, “for its data privacy and security practices.” According to the article, James’s “office sent Zoom a letter asking what, if any, new security measures the company has put in place to handle increased traffic on its network and to detect hackers” in light of the recent COVID-19 pandemic. 

As a result of these disclosures, the Company's stock price fell from $151.70 on March 27, 2020 to $121.93 per share on April 2, 2020: a $29.77 or 19.62% drop.

On April 6, 2020,  New York City’s Department of Education announced that it had banned the use of Zoom in the city’s classrooms, and the city’s mayor, Bill de Blasio disclosed that there had “been an effort by the Department of Education to work with that company to ensure the privacy of our students to make sure their information could not be accessed wrongly,” but that “[t]he chancellor and the team at the Department of Education do not believe the company has cooperated.” Consequently, the city’s Department of Education instead recommended Google or Microsoft Teams for classroom communications purposes amid the state’s shelter-in-place order during the COVID-19 pandemic.

On this, news, the Company's stock price fell from $128.20 per share on April 3, 2020 to $122.94 per share on April 6, 2020: a $5.26 or 4.10% drop. 

Contact us

Zoom Video Communications, Inc.

Loading captcha, please wait...

* The submission of this form does not create an attorney-client relationship.

Details

Filed on 04/03/2020

Ticker NASDAQ:ZM

Lead Plaintiff Deadline 06/08/2020

Office

685 Third Avenue 26th Floor

10017 New York, New York

Phone (212) 983-9330

Fax (212) 983-9331

Counsel

Richard W. Gonnello rgonnello@faruqilaw.com Phone (212) 983-9330 Fax (212) 983-9331

Finding us

Our Offices


Our offices are nationwide. If you have any questions about a case or our firm, please contact us.

New York

685 Third Avenue 26th Floor
New York, New York 10017
(212) 983-9330
(877) 247-4292
(212) 983-9331

California

10866 Wilshire Boulevard Suite 1470
Los Angeles, California 90024
(424) 256-2884
(424) 256-2885

Delaware

3828 Kennett Pike Suite 201
Wilmington, Delaware 19807
(302) 482-3182
(302) 482-3612

Georgia

3975 Roswell Rd Suite A
Atlanta, Georgia 30342
(404) 847-0617
(404) 506-9534

Pennsylvania

1617 JFK Boulevard, Suite 1550
Philadelphia, Pennsylvania 19103
(215) 277-5770
(215) 277-5771

Faruqi & Faruqi office in New York, New York

Faruqi & Faruqi office in Los Angeles, California

Faruqi & Faruqi office in Wilmington, Delaware

Faruqi & Faruqi office in Atlanta, Georgia

Faruqi & Faruqi office in Philadelphia, Pennsylvania