To Make Matters Worse! Shareholders File Class Action Lawsuit Against Zoom, Claiming High Compensation

Zoom has experienced unprecedented security doubts in the past two weeks. Now, even the most sincere letter of explanation may not be able to solve the current problem. Some shareholders have filed a class action lawsuit against Zoom through a law firm.

As of press time on April 8, 2020, Zoom's stock price fluctuated around $120, a drop of more than $251T from its all-time high of $159 reached on March 23 last month.

Shrinking market value, user bans, and a crisis of trust have all dealt a heavy blow to Zoom, but it is far from over. Recently, several class-action lawsuits have been filed across the United States targeting Zoom's security vulnerabilities. 

Three class action lawsuits in one week, all initiated by stockholders

On March 31, Samuel Taylor and others commissioned the law firm Tycko & Zavareei LLP to file a class action lawsuit against Zoom. The document stated that Zoom violated the California Consumer Remedies Act, the California Consumer Privacy Act, violated privacy rights, violated privacy contracts, violated the California Anti-Unfair Competition Law, etc., and demanded compensation.

On April 1, Lisa Ohlweiler and others commissioned Clarkson Law Firm to file a class action lawsuit against Zoom. The document stated that Zoom violated the California Business and Professions Code, the California Commercial Civil Code, Article 1, Section 1 of the California Constitution, express warranties, etc. The plaintiffs also believed that Zoom's stock price increase during the COVID-19 pandemic constituted unjust enrichment and demanded compensation.

Well-known law firms come to the rescue and recruit plaintiffs worldwide

Today, the Pomerantz Law Firm filed a class action lawsuit in the United States Northern District Court for Zoom security vulnerabilities.

In this latest class action lawsuit, the law firm alleges that the defendants made materially false and misleading statements about the company’s business, operations, and compliance policies. Zoom made false and misleading claims on its official website and in advertising materials, and failed to disclose that Zoom lacked measures to protect data privacy., the company's video communications service does not have end-to-end encryption.

Currently, Pomerantz is calling on more Zoom individual shareholders or users to join this class action lawsuit.

As long as it is between August 18, 2019 and April 6, 2020,Anyone who has purchased Zoom's publicly issued shares can join the class action lawsuit before June 8 this year., becoming one of the plaintiffs.

The law firm stated in the announcement that it will seek compensation from Zoom for damages caused by Zoom's violations of federal securities laws and seek remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (hereinafter referred to as the "Exchange Act") and Rule 10b-5 promulgated thereunder.

The law firm’s recruitment announcement also mentioned:

“The Pomerantz Law Firm is a leading corporate, securities, and antitrust litigation firm with offices around the world. Pomerantz was founded by the late Abraham L. Pomerantz, president of the Class Action Bar and a pioneer in the securities class action field, and has obtained millions of dollars in recoveries for class members.”

"Zoombombing" has become a hot word in Europe and the United States

Zoom has recently been hit by a series of impacts caused by security vulnerabilities.It has been described by European and American netizens as the Zoombombing phenomenon, and a Wikipedia page has been created for the term.

Zoombombing, also known as Zoom-bombing or Zoom Raide, refers to an individual accidentally hacking into other video conference calls due to a security vulnerability in the platform.

The term became popular in 2020 as the COVID-19 pandemic forced many people to work from home, and schools and social groups began to use video conferencing on a large scale. The term is related to and derived from the name of the Zoom video conferencing software program, but also applies to other video conferencing platforms.

Cited from Wikipedia https://en.wikipedia.org/wiki/Zoombombing

The same is true on Twitter and Facebook, where netizens and media are discussing various hot topics surrounding Zoom.

After a series of vulnerabilities were exposed, European and American netizens also shared various ways to improve Zoom's security factor to deal with Zoom Boming.

Specific methods proposed by netizens include:

Set the meeting password, change the screen sharing permission to only the meeting host, prohibit joining the meeting before it starts, prohibit file transfer, etc.

In response to a series of recent doubts and boycotts, Zoom issued a CEO statement a few days ago, announcing that it will stop version updates and invest all R&D resources into bug fixes and security maintenance. For details, please refer to the news from the day before. "Vulnerabilities exposed, corporate bans, emergency statements: What did Zoom go through in the past week?"

We cannot predict how long it will take Zoom to resolve major security vulnerabilities, nor can we predict how much it will cost to calm public opinion and deal with lawsuits.

But it is foreseeable that enterprise service products at home and abroad will learn a lot of lessons from the Zoom incident.

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