A lone investor has filed a class-action lawsuit against video conferencing platform operator Zoom, accusing it of failing to disclose existing issues that threaten its user's security and privacy. The lawsuit was filed by a Zoom investor named Michael Drieu in the US District Court for the Northern District of California.
According to the suit, Zoom's failure to disclose the various technical issues within its platform had resulted in the recent drop in its stock price, costing investors millions of dollars. Zoom's share prices have fallen over the past few days, but it remains up by about 67 percent since the start of the year.
After news of its platform's security flaws were made public, Zoom's shares fell by as much as 7.9 percent on Monday, ending the day at around $118.05 per share. On that day, it was the worst-performing stock on the NASDAQ. The stock eventually bounced back, but fell once again after several companies announced that they would be banning the use of the company's video conferencing app.
Earlier in the week, SpaceX and Tesla's Elon Musk announced that he has banned the use of the app due to its security flaws. Several schools in New York also announced similar bans, stating that they wanted to protect the privacy and security of their students. The most recent call came from Alphabet's Google, which announced on Wednesday that it will be banning its employees from using Zoom's platform.
Since the start of the coronavirus pandemic, Zoom along with other video communications platform operators, reported a massive surge in new users. As more people were ordered to stay at home to mitigate the spread of the virus, demand for online collaboration platforms such as Zoom, Slack, and Microsoft's Teams app immediately surged.
For March, Zoom reported that it had over 200 million daily users. This was a massive jump from the 10 million daily users it had reported for December of last year.
Last month, some Zoom users began sharing stories of their meetings being hijacked by other users posting toxic and pornographic content. An investigation into the company's operations also found that it had routed some calls through China in an attempt to decongest its networks.
Zoom had also been criticized for sharing its user's data with other social media companies, including Facebook. The company has so far admitted to its mistakes and has implemented measures to resolve major issues. Zoom CEO, Eric Yuan, recently apologized in a blog post, stating that it was sorry for falling short of the community's security and privacy expectations.
