Its shareholders are suing CrowdStrike after a failed software update by the cyber security firm paralyzed business and individual computers for eight million plus globally.
The case alleges that the company made several ‘false and misleading statements’ on the efficiency of software testing.
The New York-based firm’s share price slumped by 32% in the 12 days following the incident, and this wiped out $25bn (£14. 5bn) of the company’s market value.
CrowdStrike has stated that it will fight the proposed class action lawsuit in response to the allegations.
Still, the firm has explained that computers, which were the subject of the massive global IT outage, are effectively on par with normal computers now.
The US-based firm said that by the local 5:00 p.m. schedule on Monday, 29th of July (12:00 AM GMT Tuesday), the problem had then been solved—a period of ten days since the complaint was first lodged.
The shareholder lawsuit pending in the western district of Texas, Austin division, accuses CrowdStrike of securities fraud for misleading investors about software updates being thoroughly tested by the firm’s executives.
The suit is asking for the quantum of damages for having invested in CrowdStrike stock from 29 November and up to 29 July.
This is supported by chief executive George Kurtz, who, speaking to analysts during a conference call on March 5, stated that their firm’s software was validated, tested, and certified.
CrowdStrike said it had advised BBC News that it does not agree with the allegations.
“We feel there is no substance in this case, and we shall duly defend the company,” a spokesman said.
