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Zoom, a case to watch. A class action bought in my view on serious grounds. It’s a note of caution to boards on the speed at which events unfold and decisions and actions over the management of cyber security are tied to the financial markets, in this case allegations of market manipulation.
The underlying premise is that the CEO and CFO of Zoom new about and consistently mislead financial markets about its’ cyber security issues. Prior to their IPO in April 2019 and into 2020 the CEO and CFO kept making false statements about its cyber security risks and boiler plating communications prior to and post its IPO. Namely the encryption of its communications. Made misleading financial statements and reporting under its SoX obligations, by not disclosing its inadequate privacy and security, which artificially kept their share price higher than otherwise would have been the case.
Worst still it claims that the CEO sold shares in the company prior to an investigation into security issues and that the CEO and other senior executives continued to so in 2020, potentially insiders trading.
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