Harbor Capital funds sue ZoomInfo over alleged $1.2B insider stock dump

Three Harbor Capital funds sue ZoomInfo Technologies, alleging executives ran a billion-dollar stock dump.

The complaint, filed October 30 in the US District Court for the Western District of Washington, accuses the Nasdaq-listed sales-intelligence company and three of its senior leaders of pumping up a key revenue metric while quietly selling more than $1.2 billion in personal stock.

Harbor Capital Appreciation Fund, Harbor Capital Appreciation CIT, and Harbor Capital Group Trust for Defined Benefit Plans claim they relied on ZoomInfo's public financial disclosures when purchasing shares through their subadvisor, Jennison Associates.

The metric at the heart of the case is remaining performance obligations, or RPO - essentially the total dollar value of subscription contracts not yet booked as revenue. Analysts treated RPO as a barometer for customer loyalty and contract health. According to the complaint, that barometer was rigged.

The filing describes what it calls a "fraudulent scheme" resting on four pillars: selling subscriptions to anyone without credit checks, failing to account for customers who were unlikely to pay, leaving delinquent accounts on the books for up to 360 days instead of writing them off, and locking customers into coercive automatic renewals once genuine demand started to cool.

According to the complaint, ZoomInfo's CEO personally directed employees to sign up as many customers as possible before the company's June 2020 IPO, which raised approximately $1 billion through the sale of 44.5 million shares at $21 each. Multiple former employees quoted in the filing describe a sales culture with zero credit checks. One former manager's account, as cited in the complaint, captured the philosophy: "get it done, we'll deal with [any problems] later." Another former employee described the sales floor as a "boiler-room" environment, with underperformers' names displayed on office television screens.

The auto-renewal tactics described in the complaint are equally striking. According to the filing, account managers were instructed to wait until one day before the 60-day opt-out deadline to contact customers - effectively trapping them into another year. One former employee is quoted in the complaint calling the policy "entrapment." Another said the company designed renewal opt-out emails to be caught by spam filters. A former member of the revenue operations team, according to the filing, said employees "felt like they were a collections agency."

Meanwhile, the complaint alleges the company's most senior executives were unloading stock at an extraordinary pace. The CEO allegedly sold 21,617,859 shares for approximately $1.1 billion in proceeds, according to the filing. The then-CFO sold 609,343 shares for proceeds exceeding $35 million, and the then-president and COO sold more than 1,154,296 shares for nearly $66 million, the complaint alleges.

Many of these sales, according to the complaint, fell outside the executives' pre-arranged Rule 10b5-1 trading plans - and the plans themselves were allegedly adopted after the executives already possessed material nonpublic information about ZoomInfo's shaky financial foundation.

The truth dribbled out in stages, the complaint says. Between November 2022 and August 2024, each partial disclosure triggered a significant stock drop. The biggest came on August 5, 2024, when ZoomInfo announced a $33 million bad-debt charge tied to customer non-payment, cut its revenue guidance by approximately $65 million, and announced its CFO's departure. According to the complaint, the CEO later admitted at an investor conference that the company "extended credit historically to customers who weren't creditworthy."

By that point, the filing says, ZoomInfo's stock had tumbled from a high of $77.35 to $8 per share - a fall of approximately 90%.

The complaint also references a related class action - State Teachers Retirement System of Ohio v. ZoomInfo Technologies, Inc. (No. 3:24-cv-05739-TMC) - in which the same court, in October 2025, denied in part the defendants' motion to dismiss, finding that substantially similar allegations had been adequately pled.

The funds bring five causes of action under the Securities Exchange Act and common law, and seek compensatory and punitive damages.

The allegations in this complaint have not been tested, and no court has ruled on the merits of these claims.