CrowdStrike Is Sued By Shareholders Over Huge Software Outage

Shareholders have sued CrowdStrike on Tuesday, claiming the cybersecurity company defrauded them by concealing how its inadequate software testing could cause the global software outage earlier this month that crashed millions of computers. Reuters reports: In a proposed class action filed on Tuesday night in the Austin, Texas federal court, shareholders said they learned that CrowdStrike's assurances about its technology were materially false and misleading when a flawed software update disrupted airlines, banks, hospitals and emergency lines around the world. They said CrowdStrike's share price fell 32% over the next 12 days, wiping out $25 billion of market value, as the outage's effects became known, Chief Executive George Kurtz was called to testify to the U.S. Congress, and Delta Air Lines reportedly hired prominent lawyer David Boies to seek damages.

The complaint cites statements including from a March 5 conference call where Kurtz characterized CrowdStrike's software as 'validated, tested and certified.' The lawsuit led by the Plymouth County Retirement Association of Plymouth, Massachusetts, seeks unspecified damages for holders of CrowdStrike Class A shares between Nov. 29, 2023 and July 29, 2024. Further reading: Delta CEO Says CrowdStrike-Microsoft Outage Cost the Airline $500 Million

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