Governance & Derivative

Zoom Video Communications, Inc. (NasdaqGS: ZM)

Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF continues its investigation into Zoom Video Communications, Inc. (NasdaqGS: ZM).

On April 18, 2019, the Company filed its Registration Statement and Prospectus pursuant to its initial public offering (“IPO”) in which it stated “Security and disaster recovery. We offer robust security capabilities, including end-to-end encryption, secure login, administrative controls and role-based access controls.” In July 2019, the Electronic Privacy Information Center filed a complaint with the Federal Trade Commission (“FTC”) alleging that the Company had intentionally designing its web conferencing service to bypass security settings allowing a user’s web camera to be remotely enabled without their knowledge, exposing users to the risk of remote surveillance, unwanted videocalls, and denial-of-service attacks.

Beginning in late March 2020, the Company’s improper data collection and sharing practices, as well as the failure of its video conferencing software to truly support end-to-end- encryption, were revealed in a series of media reports and disclosures, including the Company’s own admissions.

In November 2020, the Company agreed to settle the FTC action, requiring it to “implement a robust information security program,” prohibits “privacy and security misrepresentations,” and levying fines of up to $43,280 for each future violation. In August 2021, the Company agreed to pay $85 million to settle a class action lawsuit claiming it violated users’ privacy rights by sharing their personal information without their permission and allowing hackers to interrupt virtual meetings.
The Company has been sued in a securities class action lawsuit for failing to disclose material information, violating federal securities laws.  Recently, the court presiding over that case denied the Company’s motion to dismiss in part, allowing the case to move forward.

KSF’s investigation is focusing on whether Zoom’s officers and/or directors breached their fiduciary duties to Zoom’s shareholders or otherwise violated state or federal laws.

If you have information that would assist KSF in its investigation, or have been a long-term holder of Zoom shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-877-515-1850 or email KSF Managing Partner Lewis Kahn (lewis.kahn@ksfcounsel.com), or fill out the form on this page.