CrowdStrike Sued By Shareholders, Here's Why!

CrowdStrike is facing a lawsuit from shareholders (photo: x @ CrowStrike)

JAKARTA - CrowdStrike is facing a lawsuit from shareholders accusing the cybersecurity company of committing fraud by hiding facts about its inadequate software trial, which allegedly caused a global blackout on 19 July.

The outage resulted in more than 8 million crash computers, including airline systems, banks, hospitals, and emergency channels around the world.

The class action lawsuit filed on Tuesday evening July 30 in Austin federal court, Texas, stated that new shareholders learned that CrowdStrice's guarantee of its technology turned out to be false and misleading material after a flawed software update disrupted various key sectors.

As a result of the incident, CrowdStrice's share price slumped by 32% within the next 12 days, removing 25 billion US dollars (Rp405.4 trillion) from the company's market value. CrowdStrice CEO George Kurtz was called to testify at the US Congress, and Delta Air Lines reportedly hired renowned attorney David Boies to demand compensation.

In a statement on Wednesday, July 31, Austin-based CrowdStrice said: "We believe this case is baseless and we will defend this company persistently." Kurtz and Chief Financial Officer total Podbere were also defendants in the lawsuit.

The lawsuit, led by the Plymouth County Retirement Association of Plymouth, Massachusetts, asks for unspecified compensation for Class A CrowdStrike shareholders between 29 November 2023 and 29 July 2024.

Delta CEO Ed Bastian told CNBC on Wednesday that the outage resulted in a loss of USD 500 million (IDR 8.1 trillion) for his airline, including lost revenue and compensation as well as hotels for stranded passengers.

CrowdStrice shares closed Wednesday down $1.69 to $231.96, after previously closing at $343.05 the day before the blackout.