Adrian Johnson
TLDR:
- CrowdStrike investors file class action suit following global IT outage.
- The Plymouth County Retirement Association alleges CrowdStrike misled investors about the efficacy of its software platform and quality control practices.
CrowdStrike is facing a federal class action suit from investors following a global IT outage that disrupted millions of Microsoft Windows systems. The Plymouth County Retirement Association alleges that CrowdStrike maintained deficient controls and did not adequately test its software, despite touting the efficacy of the Falcon platform. Investors claimed that the share price of the company dropped sharply as a result of the outage. The lawsuit also names CEO George Kurtz and CFO Burt Podbere as defendants.
The outage, which occurred on July 19, was caused by an undetected error in a rapid response content update for Windows users. The company apologized for the outage and has pledged to make major improvements in how it tests and deploys software updates to avoid putting customers at risk. The outage is expected to cost Delta Air Lines approximately $500 million due to canceled flights.
CrowdStrike shares closed at $343.05 on July 18, the day before the outage, and reached a 52-week high of $398.33 on July 9. Despite this, a CrowdStrike spokesperson stated that the case lacks merit and the company will vigorously defend itself.
It is evident that the fallout from the global IT outage has significant financial implications for both CrowdStrike investors and affected companies, highlighting the importance of robust controls and testing procedures in the cybersecurity industry.
