More than eight million computers worldwide crashed last month as a result of a software update that a cyber security company distributed. Shareholders assert that the corporation has been misled regarding the strength of the technology it possesses.
A number of the company’s shareholders have filed a lawsuit against the company that was at the center of the worldwide IT breakdown.
Attorneys assert that the cyber security business CrowdStrike committed fraud against investors by concealing weaknesses in the software testing it performed.
A software update that was distributed by the company on July 19 caused more than eight million machines to crash, which is the reason for this development.
The breakdown caused millions of organizations all across the world to experience disruptions, including airports, banks, hospitals, and broadcasting companies.
The head of CrowdStrike, George Kurtz, expressed his regret to those who were impacted and named a “software bug” as the cause of the issue. However, he acknowledged that it would take “some time” to completely resolve the issues.
According to the allegations made in the case, which was submitted in Austin, Texas, the company’s claims about its technology were both materially false and deceptive.
According to the report, the share price of CrowdStrike dropped by 32 percent in the twelve days that followed the global outage, resulting in a loss of market value of $25 billion (£19 billion).
During a conference call that took place in March, Mr. Kurtz made statements that are cited in the court complaint. In those words, he referred to the software that the company produces as “validated, tested, and certified.”
“We believe this case lacks merit, and we will vigorously defend the company,” said a representative for CrowdStrike, which is headquartered in Texas. “We will vigorously defend our company.”
The Plymouth County Retirement Association in Massachusetts is leading the case against those who owned shares in the corporation between November 29 of the previous year and July 29 of this year. The lawsuit demands damages that are not defined.
Because of the outage, the corporation can be subject to additional legal action.
Delta Air Lines is one of the companies that has indicated that it is contemplating taking legal action.
Ed Bastian, the chief executive officer of the airline, stated to CNBC on Wednesday that the disruption cost his company approximately $500 million (£390 million), which includes missed income and compensation as well as lodging for passengers who were stranded.