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Comment by judge2020 | Hacker News Reader

judge2020

Note that the lawsuit is a class action for shareholders of Zoom stock.

Filing: https://i.judge.sh/natural/Babs/1-main.pdf

Presumably the zoom user agreements include arbitration clauses, etc that prevent users from filing class actions or lawsuits.

It's a get out of jail free card they'd be dumb not to have included.

Shareholders don't sign user agreements.

I don't think there was an implication to the contrary. I read that comment as an explanation for why any lawsuit would come from the shareholders rather than the users.

Yes, that was the intention of my post, but not explicitly written, that shareholders could sue and users probably can't.

Is there a simple way for those of us who hold index funds to check if we are shareholders?

https://www.etf.com/stock/ZM

yes:

if you hold an index fund which holds zoom, you are not a shareholder, the fund managers are.

That doesn’t mean you weren’t damaged financially by their misconduct.

It probably doesn’t matter much for a small company like Zoom, but I imagine it would for MFAANG and friends.

Technically you weren't damaged, the fund was. If there is any settlement it would go to the fund, not you. Then you'd have to hope the fund passed down the settlement to you (or sue them for it).

Interesting that shareholders are the one to fill a lawsuit.

"Everything everywhere is securities fraud." [1] -- Matt Levine, Money Stuff

[1] https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

In the US lying to users is merely frowned upon while lying to investors is illegal.

False advertising of services (amongst other things) is illegal in the US.

https://www.law.cornell.edu/uscode/text/15/52#b

Yes, just this week the FTC brought a tech company to justice for false and misleading promises to users about information security:

> “We allege that Tapplock promised that its Internet-connected locks were secure, but in fact the company failed to even test if that claim was true,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Tech companies should remember the basics—when you promise security, you need to deliver security.”[1]

Armed with clear and indisputable evidence of Tapplock's blatant lies, the bulldog enforcement lawyers at the FTC took the opportunity to make an example out of the company. After 18 months of hard-fought negotiations the FTC announced a settlement agreement[2] whereby the Commission agreed to resolve the matter in exchange for Tapplock's pinky promise to not get caught doing that again. Per the arduous terms of the settlement, Tapplock neither admits nor denies any of the FTC's allegations.

So when a company promises their users security that company better deliver security. Or else... absolutely fuckall will happen.

[1]https://www.ftc.gov/news-events/press-releases/2020/04/canad...

[2]https://www.ftc.gov/system/files/documents/cases/192_3011_ta...

Shareholders sue companies all the time. Usually an enterprising law firm will cook up some claim and start collecting plaintiffs (shareholders) and then when they win the law firm collects their paycheck.

They aren't. The lawsuit is really being filed by lawyers hoping to get a windfall. They don't even need to have much of a case, at worst Zoom will pay their fees and more for the nuisance to go away.

However, they do need to pretend for the court that this more than just a lawyer led money grab and that they actually represent the interest of a plaintiff. Enters Michael Drieu. If you read the complaint [1] you'll see Michael Drieu claim damages of ... $300. He's basically enabling a shakedown out of either malice or stupidity but not greed.

So no, it is not as if the shareholders of Zoom were up in arms against the company, this is just ambulance chasing with a puppet plaintiff.

https://www.scribd.com/embeds/455562311/content?start_page=1...

> Enters Michael Drieu. If you read the complaint [1] you'll see Michael Drieu claim damages of ... $300. He's basically enabling a shakedown out of either malice or stupidity but not greed.

Those are pretty strong statements for an 11 minute old account.

Dang, you can go ahead and scold me for insinuations of shilling. I just can't help myself.

I have an older account, and agree with the parent. Shareholder lawsuits against companies simply transfer money from the company to the lawyers, and to shareholders who sold their stock between discovering the fraud and disclosing it. Shareholder lawsuits against executives would be a better way of policing fraud, but they are uncommon, likely because they are not as lucrative for lawyers.

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