Zoom Video Communications Inc. will pay $150 million to settle a proposed class action alleging that the company hid flaws in its video-conferencing app, according to a motion filed Tuesday in federal court in California.
A shareholder sued the teleconferencing company in April 2020 for allegedly concealing the truth about the app’s software encryption shortcomings and vulnerability to hackers, as well as the unauthorized disclosure of personal information to third parties like Facebook Inc.
The suit, filed in the US District Court for the Northern District of California, sought to recover damages resulting from the artificial inflation and subsequent drop of Zoom’s stock price after a series of public revelations about the app’s deficiencies in 2019.
- The settlement is the result of mediation and conferences that took more than a year, and represents more than a quarter of $525 million damages estimate
- Class includes all who acquired Zoom stock between April 18, 2019 and April 6, 2020, as set forth by the original complaint
- Lead plaintiffs’ counsel at Robbins Geller Rudman & Dowd LLP seeks 18.75% of the total settlement, payment of expenses not to exceed $400,000, plus interest, whilelead plaintiff Adam Butt seeks an award of $48,750
The case is Drieu v. Zoom Video Comms. Inc., N.D. Cal., No. 3:20-cv-02353, motion filed 10/17/23.
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