Zoom Settled With Investors Over Encryption and Privacy Failures - How to Claim Your Payout

Court: N.D. California

Case: 3:20-cv-02353

Zoom ZM has agreed to pay $150M to settle a lawsuit filed by investors who say the company misled them about the strength of its encryption and its handling of user data. The settlement, with an announced deadline for September, ends years of scrutiny over Zoom’s data privacy practices during its pandemic-fueled boom.

What Really Happened With Zoom’s Encryption Claims

Zoom had a rapid growth during the COVID times. However, in July 2019, reports began to surface pointing to security flaws in Zoom’s software encryption. The company claimed to offer full end-to-end encryption, but in reality, it was using a weaker form known as transport encryption.

The situation escalated in March 2020, when it was revealed that Zoom’s software made user data vulnerable to third parties, including Facebook. Following the press coverage, ZM shares dropped nearly 20%.

Investors Push Back—and Get Results

Despite mounting evidence of security flaws, the company continued to market itself as a secure platform—even as news reports revealed that user information was being routed through third parties and that hackers could exploit vulnerabilities. By May 2020, a group of investors filed a lawsuit, alleging that Zoom misrepresented its encryption technology and failed to disclose critical weaknesses in its privacy protections.

The Deal That Finally Closed the Chapter

Now, after years of legal battles and public scrutiny, Zoom has agreed to pay $150M to settle the claims. The settlement provides restitution for shareholders who suffered losses. You can check the latest details and file your claim here.