NEW YORK–(BUSINESS WIRE)–Labaton Sucharow LLP (“Labaton Sucharow”) announces that on April 8, 2020, it filed a securities class action lawsuit, captioned Brams v. Zoom Video Communications, Inc., No. 20-cv-2396 (N.D. Cal.) (the “Action”), on behalf of its client Kim Brams (“Brams”) against Zoom Video Communications, Inc. (“Zoom” or the “Company”) and certain executives (collectively, “Defendants”). The Action, which asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder, is brought on behalf of all persons and entities who purchased or otherwise acquired Zoom securities from April 18, 2019 through April 6, 2020, both dates inclusive (the “Class Period”), who were damaged thereby (the “Class”).
Zoom designs, develops, and sells a popular cloud-based communications platform that concentrates on video conferencing. Zoom’s flagship product is “Zoom Meetings” which is a service that allows remote users to communicate with one another through video conferencing, collaborative meetings, text based chat, and file sharing. During the first quarter of 2020 and moving into April 2020, the COVID-19 pandemic placed millions of people under directives from their state and local governments to “stay at home” or “shelter in place.” Because of Zoom’s purported security, reliability, and ease of use, the Company was seemingly well positioned to capture this new market and see exponential growth. Accordingly, Zoom video meetings exploded in popularity.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Zoom had inadequate data privacy and security measures; (ii) contrary to Zoom’s assertions, the Company’s video communications service was not end-to-end encrypted; (iii) 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; (iv) usage of the Company’s video communications services was foreseeably likely to decline when the foregoing facts came to light; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
While reports of deficiencies in Zoom’s software encryption began to come to light as early as July 2019, its services would only come under enhanced scrutiny following its boom in popularity in 2020. Beginning in late March 2020, countless news reports detailed shocking privacy issues and vulnerabilities with Zoom’s products, and revealed that the company had significantly overstated the degree to which its video communication software was encrypted. Zoom would be forced to issue numerous apologies, including the admission by the Company’s CEO that he “really messed up.” Following these revelations, the Company’s stock price experienced significant declines, thereby damaging investors.
If you purchased or otherwise acquired Zoom securities during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Northern District of California no later than June 8, 2020. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in the Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in the Action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact David J. Schwartz, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org.
Brams is represented by Labaton Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $2 trillion. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at www.labaton.com.
You can view a copy of the complaint here.