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ZM.US
id: 785

Zoom Video Communications (ZM) $150M Shareholder Settlement

N.D. California
Court
3:20-cv-02353
Case number
18 Apr 2019
Class period Start
06 Apr 2020
Class period End
Zoom recently agreed to pay $150M to settle claims from investors. The settlement resolves claims that Zoom hid problems with its software encryption and shared personal information with third parties. Outline Back in 2020, Zoom was accused of hiding problems with its software encryption, vulnerability to hackers, and sharing personal information with third parties. Much news has been reported on significant flaws in Zoom's data privacy and security measures. Following this, $ZM significantly fell, and Zoom faced a lawsuit from investors. Timeline
  • On July, 2019: News reported that Zoom's software had security issues related to encryption.
  • On March 26, 2020: Press releases revealed that user data was vulnerable to third parties, including Facebook.
  • On March 27, 2020: After this news came out, $ZM fell 19%.
  • On May 18, 2020: The stockholder filed a suit against Zoom for misleading people about its encryption and security measures.
  • On July 12, 2023: Zoom reached an agreement to resolve investors’ claims for $150 million.
Background In July 2019, reports came out about major security problems with Zoom's software encryption, raising concerns about its ability to protect user data. Despite these concerns, Zoom claimed it had full end-to-end encryption. However, it was found that Zoom was using transport encryption, which is less secure. Further news revealed that Zoom exaggerated its encryption capabilities, making user data vulnerable to third parties, including Facebook. On March 27, 2020, after these security issues were disclosed, $ZM dropped by 19.62%. After that, in 2020, Zoom was sued by shareholders who claimed the company misled them about its data privacy and security, especially its encryption. What can investors expect now? Zoom has agreed to pay $150M to settle claims from investors to resolve all the allegations related to the security problems. If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.


Case Status
Stipulative Settlement
Alleged Offence
Misleading Statements
Failure to Disclose
Omissions
Suspected Party
Directors
Management
Security Type
Stocks
Trade Direction
Long
Payout per Share
3.08
Filing date
07 April 2020
Plaintiffs
Adam M. Butt
Attorneys
Robbins Geller Rudman & Dowd LLP (San Francisco, CA)
Defendants
Eric S. Yuan, Kelly Steckelberg
Judge
Hon. James Donato
Administrator
Gilardi & Co LLC
Settlement agreement date
2023-07-17
Class wide damages
$525,000,000
Trades matching type
FIFO
+$150,000,000
Cash Settlement Amount

Frequently Asked Questions

Zoom Video Communications Inc

Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD vide...

    Ticker
    ZM.US
    ISIN
    US98980L1017
    CIK
    1585521
    Sector
    Technology
    Industry
    Software - Application
    Country
    USA
    Address
    55 Almaden Boulevard, San Jose, CA, United States, 95113