COLUMBUS, Ohio — Ohio Attorney General Dave Yost has filed a motion requesting that Ohio be designated as the lead plaintiff in a securities class-action lawsuit accusing ZoomInfo Technologies Inc. of misleading investors, which allegedly led to $75.9 million in losses for two major state retirement funds. The lawsuit, recently filed in the U.S. District Court for the Western District of Washington, asserts that the company’s deceptive practices harmed the Ohio Public Employees Retirement System (OPERS) and the State Teachers Retirement System (STRS).
ZoomInfo, a software and data provider, is alleged to have engaged in securities fraud from November 2020 to August 2024 by concealing a drop in demand for its product following a temporary revenue surge during the early stages of the COVID-19 pandemic. According to the lawsuit, ZoomInfo inflated its stock price by falsely attributing its growth to the strength of its services, even as the company faced mounting challenges in sustaining customer interest.
“ZoomInfo’s leadership willfully blinded investors to the reality that interest in the company’s product was waning,” Yost said. He argues that Ohio should lead the class-action case, as the state represents the significant financial impact felt by OPERS and STRS due to their substantial investments in ZoomInfo.
The complaint outlines alleged tactics used by ZoomInfo to artificially sustain its stock value, including coercive auto-renewal policies that limited clients’ ability to cancel their subscriptions. The company reportedly used aggressive measures, even threatening legal action, to discourage cancellations. In addition, the lawsuit claims that ZoomInfo increased its subscriber base by extending credit to numerous small, high-risk businesses, many of which later defaulted on their contracts.
Named defendants in the case include CEO Henry Schuck, former CFO Cameron Hyzer, and major shareholders TA Associates, The Carlyle Group, and DO Holdings (WA), who are accused of profiting from the inflated stock prices while allegedly knowing the company’s true financial state.
Ohio’s motion aims to recoup the financial losses incurred by OPERS and STRS, as well as other investors affected by ZoomInfo’s alleged misconduct. If successful, the lawsuit could hold the tech company accountable for the alleged misrepresentation and its impact on public funds.