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The Courts Businesses Privacy Security

Zoom Accused of Misrepresenting Security Measures In New Lawsuit (gizmodo.com) 22

Video conferencing company Zoom is being used by a shareholder over allegations of fraud and overstating the security protocols in place on its service. Gizmodo reports: In the lawsuit filed Tuesday in the U.S. District Court for the Northern District of California, plaintiff Michael Drieu -- on behalf of individuals who purchased Zoom securities after the company went public last year -- accuses the company of making "materially false and misleading statements" about its product and failing to disclose key information about the service. Namely, the suit cites Zoom as claiming that its product supported end-to-end encryption, when in fact it supports a different form of encryption called transport encryption -- as the Intercept reported last month -- that still allows Zoom to access data.

Additionally, the suit alleges that Zoom's security failures put users "eat an increased risk of having their personal information accessed by unauthorized parties, including Facebook," that these facts would necessarily result in a decline in users, and that the company's responses to ongoing reporting on myriad problems on the service were "misleading at all relevant times." The suit states that the fallout from these incidents was exacerbated by the covid-19 crisis, during which time users of the service jumped from just 10 million to 200 million in a matter of months as schools and organizations turned to Zoom amid social distancing measures and shelter-in-place orders. The suit cites documentation related to Zoom's IPO as evidence that the company misrepresented the security protocols in place for protecting users. Specifically, the suit states, Zoom said it offered "robust security capabilities, including end-to-end encryption, secure login, administrative controls and role-based access controls," and -- in what was clearly an embarrassing claim by the company -- that it strives "to live up to the trust our customers place in us by delivering a communications solution that "just works.'"

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Zoom Accused of Misrepresenting Security Measures In New Lawsuit

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  • by goose-incarnated ( 1145029 ) on Wednesday April 08, 2020 @06:38PM (#59923446) Journal

    Video conferencing company Zoom is being used by a shareholder

    Seriously, is it too much to ask that an editor spells four-letter words correctly? What happened? Did you not read the submission and instead relied on little red squiggles to let you know something might be wrong?

    • by znrt ( 2424692 )

      wait until you get to the part where "users eat an increased risk" ...

      it must have been very urgent to get this story out, this is surely critical news.

    • by Sebby ( 238625 )
      It had to be used by the shareholder, otherwise he wouldn’t have standing in the suit.
  • So the plaintiffs are pissed that Zoom stock has doubled since it IPO'd while the S&P is down ~25%.

    The USA needs to get to a loser-pays situation with these lawsuits. It's crap that every other week I get a postcard in the mail informing me that I will get $3.52 for being a member in a class action lawsuit whilst the layers walk away with millions. Companies pay because its easier, but its crap.

    • by alvian ( 6203170 )

      It's crap that every other week I get a postcard in the mail informing me that I will get $3.52 for being a member in a class action lawsuit whilst the layers walk away with millions.

      That's because lawyers are taking the risk that lawsuit will win or settle. Law firm might have to even get a loan to float the firm until it pays out. It could go out of business if he doesn't pay out. There is nothing stopping anyone harmed to file a lawsuit. If they don't mind spending millions of dollars for a chance at the payday years down the line. In that case lawyers will only be paid for work done.

  • Since when did it make sense for a shareholder to sue their own company? For misleading customers? Maybe the customers could sue for proven losses, or the sharholders could fire the directors in an annual meeting. What an odd systen the US has.
    • Since when did it make sense for a shareholder to sue their own company?

      If the shareholder believes that the majority of the population are paying attention to cybersecurity news (they're not), then usage of Zoom is about to trend towards 0. At which point the shares will be worthless. But if they can sue and win money, they may make a profit in what otherwise would be a loss scenario.

    • Even investors can sue ... not just shareholders. The reason is that they put in money to buy shares of this company, because the people who run it claim "A, B, C" but it's not the truth. So people who bought shares loose money because of the scandal and the business (or its insurance carrier) must pay for the loss of investment/profit.

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