SAN DIEGO & SAN JOSE, Calif.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP reminds investors that a purchaser of Zoom Video Communications, Inc. (NASDAQ: ZM) filed a class action complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between April 18, 2019 and April 6, 2020. Zoom provides a video-first communications platform that connects people through frictionless video, voice, chat, and content sharing.
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Zoom Video Communications, Inc. (ZM) Accused of Misleading Shareholders
According to the complaint, in April 2019, Zoom conducted its initial public offering ("IPO") touting the Company's "robust security capabilities, including end-to-end encryption..." Belying this statement, Zoom's privacy and security flaws were revealed as early as July 2019. Nevertheless, Zoom executive continued to tout its security and integration features. On March 26, 2020, Vice Media reported that Zoom "is not forthcoming with the data collection or the transfer of it to Facebook." And, on March 30, 2020, The New York Times reported that Zoom was under scrutiny by the office of New York State Attorney General "for its data privacy and security practices." Further, several consumers have filed lawsuits against the Company for "illegally disclosing personal information." Multiple other news outlets have revealed that Zoom did not actually have its purported end-to-end encryption for video and audio content. As a result, multiple organizations banned the use of Zoom's software. Finally, on April 6th, 2020, Yahoo! Finance reported that "an actor in a popular dark web forum posted a link to a collection of 352 compromised Zoom accounts." Following all of these disclosures, Zoom's stock price fell 13% from its closing price of $141.15 on March 26, 2020 to close at $122.94 per share on April 6, 2020.
Zoom Video Communications, Inc. (ZM) Shareholders Have Legal Options
Robbins LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Click here to receive free alerts from Stock Watch when companies engage in wrongdoing.
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