Zoom Video Communications has been sued by a shareholder and accused of fraud amid mounting security concerns over the popular video-conferencing app.
In a complaint filed on Tuesday in a San Francisco federal court, the company and its top officers were accused of concealing the truth about shortcomings in the app’s software encryption, including its alleged vulnerability to hackers, as well as the unauthorised disclosure of personal information to third parties including Facebook.
Investor Michael Drieu, who filed the suit as a class action, claims a series of public revelations about the app’s deficiencies starting last year have dented Zoom’s stock price — though the shares are still up 67% this year as investors bet that the teleconferencing company would be one of the rare winners from the coronavirus pandemic.
Zoom CEO Eric Yuan has apologised for the lapses, acknowledging in a blog post last week that the company had fallen short of expectations over privacy and security. — Reported by Peter Blumberg, (c) 2020 Bloomberg LP