Company name Zoom Video Communications, Inc.
Stock symbol ZM
Status Class Action Complaint Filed

NEW YORK, May 20, 2020 –Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of investors that purchased Zoom Video Communications, Inc. (NASDAQ: ZM) securities between April 18, 2019 and April 6, 2020 (the “Class Period”). Investors have until June 8, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

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 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, to close at $122.94 on April 6, 2020.

The Complaint, filed on April 7, 2020, 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.

If you purchased Zoom shares during the class period, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa Fortunato or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out the contact form below. There is no cost or obligation to you.

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The submission of this form does not create an attorney-client relationship, nor any obligation on the part of Bragar Eagel & Squire, P.C., or you to file a legal action. Any information you submit will be maintained as confidential. If Bragar Eagel & Squire, P.C., in its sole discretion, believes that you might be an appropriate class representative, Bragar Eagel & Squire, P.C., will contact you to discuss the matter and to determine whether to establish an attorney client relationship.

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