Ohio Attorney General Dave Yost is taking a data giant to court over serious securities fraud allegations that have rocked state workers’ financial security. Yost has filed a motion to position Ohio as the lead plaintiff in a class-action lawsuit against ZoomInfo Technologies Inc. to seek justice and recoup massive losses. The case, emerging from the Western District of Washington, charges the company with misleading investors and beckoning a staggering $75.9 million loss for two significant Ohio state pension funds, according to an announcement on
Ohio Attorney General Dave Yost’s website
.
Set against a backdrop of a global pandemic, the lawsuit alleges ZoomInfo, a software company that assists businesses in identifying potential customers, saw an initial burst in revenue but then concealed from its investors a concerning decline in product interest.
Ohio Attorney General Dave Yost
stated, “ZoomInfo’s leadership willfully blinded investors to the reality that interest in the company’s product was waning. Their reckless deception inflicted serious losses for Ohio’s pension systems and other investors, and we’re demanding accountability.” The defendants include ZoomInfo CEO Henry Schuck, former CFO Cameron Hyzer, and notable shareholders such as TA Associates, The Carlyle Group, and DO Holdings (WA).
The alleged scheme crafted by ZoomInfo spun a web of deceptive practices designed to inflate stock value artificially. The lawsuit elaborates on accusations ranging from coercive auto-renewal policies to threats of legal action, which were strategically used to prevent subscribers from canceling their contracts. In an aggressive pursuit of growth, the company is also said to have extended credit to a large number of high-risk, small-business clients, many of whom defaulted, adding layers of risk to an already precarious strategy.
When the false front crumbled, ZoomInfo was forced to disclose disappointing financials that illuminated extensive contract cancellations and significant amounts of uncollected debt, leading to a steep 80% fall in stock value. This financial descent sent shockwaves through the market, culminating in billions of dollars in shareholder losses. The lawsuit seeks to correct the financial wrongs born by the company’s purported wrongdoing.
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