Class action: Shareholders sue CrowdStrike for misleading statements
As recently as March, the CEO of the software company described his product as validated, tested and certified, thus misleading investors.
The Federal Court of Justice (BGH) in Karlsruhe is considering whether parents are liable if their children illegally download music from the Internet.
(Image: dpa, Uli Deck)
New trouble for CrowdStrike: the crisis-ridden company is facing another lawsuit. After disgruntled major customers, shareholders are now mobilizing their lawyers. They claim that the software manufacturer misled them about the nature of its products and is therefore liable for share losses. CrowdStrike takes a different view and plans to defend itself vigorously against the accusations.
On July 30, shareholders of the company filed a class action lawsuit in federal court in the US state of Texas. The lead plaintiff is the Plymouth County Retirement Association, a US pension fund. The plaintiffs accuse CrowdStrike of making materially false and misleading representations about its own products, which led to losses on the stock market after the default.
Misleading claim by the CEO?
The plaintiffs are particularly bothered by a statement made by CrowdStrike CEO George Kurtz. In a conference call with investors on March 5 of this year, Kurtz described the software responsible for the global outage as "validated, tested and certified".
CrowdStrike had notified its investors and the U.S. Securities and Exchange Commission (SEC) of the incident in a mandatory 8-K fil ing on July 22, the business day following the outage. Nevertheless, a large part of the now criticized price loss had already been incurred on that day. Those affected are therefore invited to join the class action until the end of September. CrowdStrike shares have lost around 40 percent of their value since July 19 and stand at around EUR 216.
The company believes the lawsuit is unfounded. The news agency Reuters quotes CEO Kurz and Chief Financial Officer Burd Podbere as saying that they want to "vigorously defend the company". Both are named as defendants in the statement of claim.
Empfohlener redaktioneller Inhalt
Mit Ihrer Zustimmmung wird hier ein externer Podcast (Podigee GmbH) geladen.
Ich bin damit einverstanden, dass mir externe Inhalte angezeigt werden. Damit können personenbezogene Daten an Drittplattformen (Podigee GmbH) übermittelt werden. Mehr dazu in unserer Datenschutzerklärung.
Following the devastating outage that affected millions of Windows computers worldwide on July 19, CrowdStrike is in the spotlight as the culprit. The company had installed a signature update for its "Falcon" security solution, which caused a "blue screen of death" – on many computers in an endless loop due to a chain of several bugs. The effects were felt worldwide, especially at airports and airlines. The question of liability arose early on: the US airline Delta recently became the first major customer to announce legal action against CrowdStrike and Microsoft, which put further pressure on the security company's share price.
(cku)
