Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Zoom Video Communications, Inc. (ZM)

NEW YORK, April 08, 2020 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Zoom Video Communications, Inc. (“Zoom” or the “Company”) (Nasdaq: ZM) in the United States District Court for the Northern District of California on behalf of those who purchased or acquired the securities of Zoom between April 18, 2019 and April 6, 2020, inclusive (the “Class Period”).  The lawsuit seeks to recover damages for Zoom investors under the federal securities laws.
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (1) Zoom had inadequate data privacy and security measures; (2) contrary to Zoom’s assertions, the Company’s video communications service was not end-to-end encrypted; (3) 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; (4) usage of the Company’s video communications services was foreseeably likely to decline when the foregoing facts came to light; and (5) as a result, the Company’s public statements were materially false and misleading at all relevant times.On or around April 18, 2019, Zoom conducted its initial public offering (“IPO”), selling 9.91 million shares priced at $46 per share.  Then, on March 31, 2020, The Intercept reported that Zoom’s video conferencing software is not, in fact, end-to-end encrypted between meeting participants, contrary to the Company’s suggestion. Then, on April 1, 2020, post-market, citing review of an internal memo, Reuters reported that Space Exploration Technologies Corp. (“SpaceX”) had banned its employees from using Zoom’s video conferencing software, due to “significant privacy and security concerns.” Between March 30 and April 2, 2020, Zoom’s stock price fell $28.95 per share, or 19.19%, to close at $121.93 per share on April 2, 2020.Investors who purchased or otherwise acquired shares of Zoom during the Class Period should contact the Firm prior to the June 8, 2020 lead plaintiff motion deadline.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at [email protected] or [email protected].Please visit our website at http://www.gme-law.com for more information about the firm.
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