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CrowdStrike sued over global IT outage

by admin August 1, 2024
August 1, 2024
CrowdStrike sued over global IT outage

The firm at the centre of the global IT outage last month is being sued by some of its shareholders.

Lawyers claim cyber security company CrowdStrike defrauded investors by concealing flaws with its software testing.

It comes after a software update sent out by the firm caused more than eight million computers to crash on 19 July.

The meltdown hit thousands of businesses worldwide, disrupting airports, banks, hospitals and broadcasters.

CrowdStrike boss George Kurtz apologised to those affected and blamed a “software bug”, but admitted it would take “some time” to fully fix the problems.

The lawsuit, which was filed in Austin, Texas, alleges the firm’s assurances about its technology were materially false and misleading.

It noted that CrowdStrike’s share price plummeted 32% in the 12 days following the global outage, wiping out $25bn (£19bn) of its market value.

The legal complaint quotes statements by Mr Kurtz during a conference call in March, in which he described the company’s software as “validated, tested and certified”.

A spokesperson for CrowdStrike, which is based in Texas, said: “We believe this case lacks merit and we will vigorously defend the company.”

The lawsuit, led by the Plymouth County Retirement Association in Massachusetts, seeks unspecified damages for those who held shares in the company between 29 November last year and 29 July.

The company could face further lawsuits over the outage.

Delta Air Lines is among those who have said they are considering legal action.

The carrier‘s chief executive Ed Bastian told CNBC on Wednesday the outage cost his firm around $500m (£390m), including lost revenue and compensation and hotels for stranded fliers.

This post appeared first on sky.com

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