Zoom Video Communications was slapped with a class-action suit by one of its shareholders on Tuesday, accusing the video-conferencing app of overstating its privacy requirements and failing to disclose that its service was not end-to-end encrypted.
Shareholder Michael Drieu claimed in a court submitting that a string of recent media reports highlighting the privacy flaws in Zoom’s app have led to the company’s stock, which had rallied for a number of days at the beginning of the year, to drop.
The company’s shares settled down around 7.5% at $113.75 Tuesday. They’ve lost almost a third of their market value since touching record highs in late-March.
Zoom Chief Executive Eric Yuan last week apologized to users, saying the corporate had fallen short of the neighborhood’s privacy and security standards and was taking measures to fix the issues.
Zoom has been making an attempt to plug safety points, because it indicators up thousands of recent customers from the world over as individuals are compelled to work at home after lockdowns have been enforced to sluggish the unfold of the coronavirus.
Nonetheless, the corporate is going through a backlash from customers anxious concerning the lack of finish-to-finish encryption of assembly periods and “zoombombing”, the place uninvited company crash into conferences.