A securities class action has been filed in the USDC — W.D.TX. against CrowdStrike Holdings, Inc. (CRWD) (“CrowdStrike” or the “Company”), on behalf of all persons or entities that purchased or otherwise acquired CrowdStrike Class A common stock between November 29, 2023 and July 29, 2024, both dates inclusive (the “Class Period”).
CrowdStrike, headquartered in Austin, Texas, is a global cybersecurity company that provides software that helps prevent data breaches. CrowdStrike’s customers are major corporations across several industries including airlines, banks, hospitals, and telecommunications providers as well as government entities. CrowdStrike’s main product is the Falcon software platform, which purportedly uses artificial intelligence and machine learning technologies to detect, prevent, and respond to security breach threats. The Falcon software is embedded in the computers of CrowdStrike’s customers and requires constant updates.
The claim arises on July 19, 2024, when news broke that a flawed Falcon content update caused major worldwide technology outages for millions of devices running Microsoft Windows (the “CrowdStrike Outage”).
Throughout the Class Period, Defendants repeatedly touted the efficacy of the Falcon platform while assuring investors that CrowdStrike’s technology was “validated, tested, and certified.” The Complaint alleges that these statements were false and misleading because Defendants had failed to disclose that:
(1) CrowdStrike had instituted deficient controls in its procedure for updating Falcon and was not properly testing updates to Falcon before rolling them out to customers;
(2) this inadequate software testing created a substantial risk that an update to Falcon could cause major outages for a significant number of the Company’s customers; and
(3) such outages could pose, and in fact ultimately created, substantial reputational harm and legal risk to CrowdStrike. As a result of these materially false and misleading statements and omissions, CrowdStrike stock traded at artificially high prices during the Class Period, thereby causing harm to investors.
As a result, shares of CrowdStrike fell $25.16, or 10%, to close at $233.65 on July 30, 2024.
If you purchased CrowdStrike Class A common stock during the class period and would like to receive more information or join the action, please enter your contact information below for a FREE consultation and click “Submit Your Information”.
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