CrowdStrike is facing a federal class action suit from investors following the global IT outage that disrupted millions of Microsoft Windows systems.
The Plymouth County Retirement Association alleges CrowdStrike maintained deficient controls and did not adequately test its software, despite repeated statements touting the efficacy of the Falcon platform, according to the complaint filed Tuesday in the U.S. District Court for the Western District of Texas.
Investors claimed the share price of the company dropped sharply as a result of the outage. CrowdStrike shares on Thursday opened at $232 a share. CrowdStrike shares closed at $343.05 on July 18, the day before the outage and reached a 52-week high of $398.33 on July 9.
The suit also names CEO George Kurtz and CFO Burt Podbere as defendants. "We believe this case lacks merit and we will vigorously defend the company," a CrowdStrike spokesperson said in an emailed statement.
CrowdStrike, in a preliminary report, said the July 19 outage was due to an undetected error in a rapid response content update for Windows users.
Kurtz apologized for the outage and the company has since pledged to make major improvements in how it tests and deploys software updates to make sure they are phased to avoid putting so many customers at risk.
Delta Air Lines plans to pursue legal action against CrowdStrike and Microsoft. The company said the outage will cost the airline about $500 million as thousands of flights were canceled.
CrowdStike on Wednesday said 99% of Windows sensors were back up and running, in an update on recovery efforts.
