Shareholders Sue CrowdStrike Over Global Outage

Following the recent global outage that affected over 8 million computers, CrowdStrike is currently facing a class action lawsuit by shareholders. The lawsuit filed by the shareholders reportedly alleges that the cybersecurity firm misled and defrauded the investors by making “false and misleading” claims over the testing of its software update, which disrupted airlines, banks, and other services around the world.

According to a BBC report, the lawsuit was filed in the Austin, Texas federal court. As per the lawsuit, the CrowdStrike executives defrauded investors by making them believe that the firm's software updates were adequately tested. The lawsuit also claims that the firm's share price dropped 32% in the 12 days after the outage, wiping out $25 billion of market value. The complaint also cited a statement made by chief executive George Kurtz, who said in a conference call on March 5 that CrowdStrike's software is "validated, tested and certified."

At the same time, the Austin-based company denied the allegations and said that it will defend itself against the class action lawsuit. “We believe this case lacks merit and we will vigorously defend the company,” a spokesperson said, as quoted by the BBC. Meanwhile, Delta Air Lines Chief Executive Ed Bastian told in a recent interview that the airline is facing $500 million in costs related to the global tech outage. Delta is also reportedly preparing to seek compensation from CrowdStrike.