CrowdStrike sued by investors after global tech outage – Orange County Register

Investors are suing CrowdStrike after a software update caused nationwide outages two weeks ago.

The lawsuit accuses CrowdStrike of lying to investors by claiming its technology had been “proven, tested, and certified.”

CrowdStrike’s stock price was predictably down after the July 19 outage disrupted a range of services across the country, from flights to court hearings to hospital visits.

The company ultimately blamed the outage on a bug in its latest update, which it rolled out to millions of customers. Some 8.5 million computers crashed because of bad CrowdStrike data.

In March, CrowdStrike CEO and founder George Kurtz assured investors on a conference call that the company’s software had been rigorously tested, according to the lawsuit. The plaintiffs accuse CrowdStrike and Kurtz of lying to mislead investors and inflate the stock price.

The lawsuit alleges that CrowdStrike’s stock price was artificially inflated based on this information as of November 2023. The lawsuit was formally filed by the Plymouth County Retirement Association of Plymouth, Massachusetts, and seeks class action status for all individuals who owned CrowdStrike stock.

“We believe this case is without merit and we will vigorously defend the company,” a CrowdStrike spokesman told the BBC.

CrowdStrike was almost immediately threatened with lawsuits after the crash that ruined travel plans for millions of Americans. Delta CEO Ed Bastian said Wednesday that the crash likely cost the airline $500 million and that it would likely seek compensation.

“You can’t come into a mission-critical 24/7 and tell us we have a bug,” he said in an interview. “We have to protect our customers, our employees from damage, not just cost damage, but brand damage, reputation damage.”