CrowdStrike wins in lawsuit with shareholders over outage

"A federal judge in the United States has dismissed a lawsuit filed by CrowdStrike shareholders. They claimed that the cybersecurity company had misled them about inadequate software testing and quality assurance surrounding the July 2024 outage that crashed more than 8 million Windows computers. On July 19, 2024, a faulty update to CrowdStrike's Falcon software caused global chaos. Airlines, banks, and hospitals were shut down. In the days following the outage, CrowdStrike's share price fell by 32 percent."

"The lawsuit was filed by shareholders led by Thomas DiNapoli, the administrator of the New York State Common Retirement Fund. With $291.4 billion, this is one of the largest pension funds in the US. The shareholders claimed that CrowdStrike had insufficient quality controls, citing former employees. No evidence of deception Judge Robert Pitman of the federal court in Austin, Texas, ruled that the shareholders had not demonstrated that CrowdStrike had deliberately misled them."

"The judge found two questionable statements regarding compliance with security requirements set by federal agencies, such as the Department of Defense. However, he concluded that shareholders had not credibly demonstrated fraudulent intent by executives or by CrowdStrike itself. Cathleen Anderson, chief legal officer of CrowdStrike, said she was pleased with the ruling. "We appreciate the court's thoughtful consideration and decision to dismiss this case," Anderson said. A spokesperson for DiNapoli said the ruling is "under review.""

A federal judge dismissed a shareholder lawsuit alleging CrowdStrike misled investors about testing and quality assurance tied to the July 19, 2024 Falcon outage. A faulty Falcon update crashed more than 8 million Windows computers, disrupting airlines, banks and hospitals and triggering a 32 percent share-price drop that erased roughly $25 billion in market value. The suit was led by Thomas DiNapoli for the New York State Common Retirement Fund, which manages $291.4 billion. Judge Robert Pitman found plaintiffs failed to show deliberate deception despite identifying two questionable compliance statements. CrowdStrike's chief legal officer welcomed the dismissal, a DiNapoli spokesperson said the ruling is under review, and other legal pressure, including a Delta lawsuit, continues.

Read at Techzine Global