SEC, State Attorneys Investigate Zoom Over China Contacts

After several months of investigation by the U.S. Securities and Exchange Commission and two U.S. Attorneys’ offices, Zoom Video Communications revealed that it has provided investigators with information regarding its interactions with China and other governments in addition to security and user privacy issues. A former employee based in China, Xinjiang Jin (also known as Julien Jin) has been charged by the Department of Justice for helping the Chinese government halt a remote commemoration of the Tiananmen Square uprising.

Bloomberg reports that, “Jin was meant to be Zoom’s liaison with Chinese authorities on national security requests, but instead did the government’s bidding in concert with other employees.” After an internal investigation, Zoom terminated Jin’s employment “and has placed employees suspected of assisting him on leave until it completes the inquiry.”

The company stated it that, in June, it “received a grand jury subpoena … from the U.S. Attorney’s Office for the Eastern District of New York, requesting information about interactions with foreign governments and political parties, including the Chinese government.”

In July, it also got subpoenas from the U.S. Attorney’s Office of the Northern District of California and the SEC, seeking “documents and information about security and privacy matters, such as Zoom’s data encryption, how the company calculates usage metrics and public disclosures about each.”

Prosecutors also want to know “about contact between Zoom employees and representatives of the Chinese government, as well as if a foreign government had ever tried to or succeeded in influencing the company’s policies, practices or actions relating to U.S.-based users.” Zoom stated that it is “fully cooperating” with authorities.

Having skyrocketed during the COVID-19 pandemic, Zoom said that by the end of October “it had 433,700 customers with more than 10 employees compared with 74,100 in the fiscal third quarter a year earlier.” Its stock has also risen 500 percent.

The New York Times reports that Xinjiang Jin blocked the event by “fabricat[ing] reasons to suspend accounts of people in New York who were hosting memorials on the anniversary of the Tiananmen Square massacre and coordinated with Chinese officials to identify potentially problematic meetings.”

He stands “accused of working with others to log into the video meetings under aliases.” He was responsible for terminating “at least four meetings … largely attended by U.S.-based users.” Because China does not have an extradition treaty with the U.S., Jin “has not been arrested and is at large in China.”

FBI director Christopher Wray stated that, “Americans should understand that the Chinese government will not hesitate to exploit companies operating in China to further their international agenda, including repression of free speech.” Zoom responded to the event by stating that, “it has since provided end-to-end encryption for all users and restricted access for China-based employees to Zoom’s global network.”

In Brooklyn, acting U.S. Attorney Seth DuCharme, whose office brought the case, noted that it “exposed the security vulnerabilities of American tech companies that engage in the ‘Faustian bargain’ of operating in China.”