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CrowdStrike is sued by shareholders over huge software outage (www.reuters.com)

submitted 3 months ago by [email protected] to c/[email protected]

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[–] [email protected] 4 points 3 months ago

CrowdStrike (CRWD.O), has been sued by shareholders who said the cybersecurity company defrauded them by concealing how its inadequate software testing could cause the July 19 global outage that crashed more than 8 million computers.

In a proposed class action filed on Tuesday night in the Austin, Texas federal court, shareholders said they learned that CrowdStrike's assurances about its technology were materially false and misleading when a flawed software update disrupted airlines, banks, hospitals and emergency lines around the world.

Basically, the company advertised itself as being one way to the shareholders, they bought in on that basis, and then it turned out they were misrepresenting themselves. Presumably they're suing the company and not the executives personally because that's where the money is.

Note that simply owning the shares doesn't mean that it's already "their money." If I buy a share in a company I can't walk up to it and demand that they give me a portion of the cash from the register. It's more complicated than that and lawsuits like this are part of that complexity.