9th Circ. Affirms Ax Of Zendesk Investors' Data Breach Suit

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By Ben Kochman (March 3, 2022, 10:15 PM EST) — Zendesk Inc. investors have not adequately alleged that the software company committed securities fraud by misleading them about the state of its cybersecurity before announcing a data breach in September 2019, the Ninth Circuit has found.

In a 3-0 ruling, the appeals court on Wednesday upheld a California federal court’s dismissal of a proposed class action led by pension fund Local 353 I.B.E.W. The fund, along with other Zendesk investors, had argued that the company’s public pledge that its data security was “of the highest quality” deceived them before the 2019 disclosure, which led to a 4% drop in the company’s stock price….

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