NEW YORK, April 27, 2020 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Zoom Video Communications, Inc. (“Zoom” or the “Company”) (NASDAQ: ZM) and certain of its officers. The class action, filed in United States District Court for the Northern District of California, and indexed under 20-cv-02353, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Zoom securities between April 18, 2019, and April 6, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Zoom securities during the class period, you have until June 8, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Zoom provides a video communications platform application (“app”) that allows users to interact with each other primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. Users may connect through frictionless video, voice, chat, and content sharing. The Company’s cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting. The Company serves education, entertainment/media, enterprise infrastructure, finance, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries, as well as individuals.
On March 22, 2019, Zoom filed a registration statement on Form S-1 with the SEC in connection with its initial public offering (“IPO”), which, after several amendments, was declared effective by the SEC on April 17, 2019 (the “Registration Statement”).
On April 18, 2019, Zoom filed a prospectus on Form 424B4 with the SEC in connection with its IPO, which purported to provide information necessary for investors to consider before partaking in its IPO and purchasing the Company’s newly publicly-issued stock (collectively with the Registration Statement, the “Offering Documents”).
The Complaint alleges that 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.
The truth about the deficiencies in Zoom’s software encryption began to come to light as early as July 2019. However, due in large part to the Company’s obfuscation, it was not until the COVID-19 pandemic in March and April of 2020, with businesses and other organizations increasingly relying on Zoom’s video communication software to facilitate remote work activity as governments increasingly implemented shelter-in-place orders, that the truth was more fully laid bare in a series of corrective disclosures. As it became clear through a series of news reports and admissions by the Company that Zoom had significantly overstated the degree to which its video communication software was encrypted, and organizations consequently prohibited their employees from utilizing Zoom for work activities, the Company’s stock price plummeted, damaging investors.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby