Austin-based Cybersecurity firm CrowdStrike is facing a class action lawsuit from shareholders who claim the company defrauded them by concealing how its inadequate software testing could cause a global computer outage, resulting in a big hit to the share price and overall market value.
On July 19, an outage, allegedly sparked by a software update, affected about 8.5 million computers around the world. Airlines, banks, retail and media outlets, and hospitals were among organizations that lost access to computer systems. CrowdStrike has said there was an undetected error in an update for its security software that provides new instructions for the program on how to spot and stop novel threats.
According to the July 30 complaint filed in the United States District Court in the Western District of Texas, CrowdStrike’s Chief Executive George Kurtz characterized CrowdStrike’s Falcon software as “validated, tested and certified” during a conference call on March 5.
The plaintiffs say these statements were “false and misleading” because CrowdStrike allegedly failed to properly test and update its Falcon software before rolling it out to customers. […]
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