Shareholders of CrowdStrike, a cyber security company, have filed a lawsuit against the firm for allegedly defrauding investors by withholding information about flaws in its software testing. This comes after a software update released by the company caused a global IT outage on 19 July, affecting over eight million computers and disrupting businesses worldwide.
CrowdStrike CEO George Kurtz apologized for the incident and attributed it to a “software bug”. However, he acknowledged that it would take some time to fully resolve the issues. The lawsuit, filed in Austin, Texas, claims that the company’s claims about the reliability of its technology were false and misleading. It also highlights that CrowdStrike’s stock price dropped by 32% in the 12 days following the outage, resulting in a loss of $25 billion in market value.
The legal complaint includes statements made by Mr. Kurtz during a conference call in March, where he described the company’s software as “validated, tested, and certified”. A spokesperson for CrowdStrike, which is headquartered in Texas, has stated that they believe the case lacks merit and that they will vigorously defend the company.
The lawsuit, led by the Plymouth County Retirement Association in Massachusetts, seeks unspecified damages for investors who held shares in the company between 29 November 2019 and 29 July 2020. CrowdStrike may also face further lawsuits from other affected parties, such as Delta Air Lines, who have stated that they are considering legal action. Delta’s CEO Ed Bastian revealed on CNBC that the outage cost the airline around $500 million, including lost revenue and expenses for stranded passengers.
In other news, the Federal Reserve has once again decided to hold interest rates, citing uncertainty in the economic recovery. In addition, several airlines have been ranked as the “worst” for customer service, according to a recent survey. And in a separate incident, a mass food poisoning outbreak has occurred at TikTok’s headquarters. Stay updated with the latest news by visiting Sky News.
