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| CrowdStrike Faces Shareholder Lawsuit After Update Crashes Millions of Computers Image credit: MSP Today |
Update Crash and Global Chaos
A faulty update by cybersecurity firm CrowdStrike resulted in the crash of over eight million computers, causing widespread chaos around the world. The update, released on 19 July, disrupted businesses and services, including airlines, banks, and hospitals. In a detailed review of the incident, CrowdStrike revealed that a "bug" in a system designed to ensure software updates worked properly was to blame. The glitch allowed "problematic content data" in a file to go undetected. CrowdStrike has stated that better software testing and checks, including more scrutiny from developers, could prevent similar incidents in the future.
Lawsuit and Allegations
Shareholders are now suing CrowdStrike, accusing the company of making "false and misleading" statements about its software testing. The lawsuit, filed in the Austin, Texas federal court, alleges that CrowdStrike executives defrauded investors by making them believe the company's software updates were adequately tested. It cites chief executive George Kurtz, who said in a conference call on 5 March that the firm's software was "validated, tested and certified."
Financial Impact
The incident had significant financial repercussions. The company's share price dropped 32% in the 12 days following the update, resulting in a loss of $25 billion (£14.5 billion) in market value. The lawsuit seeks an unspecified amount of compensation for investors who owned CrowdStrike shares between 29 November and 29 July.
Company and Third-Party Responses
CrowdStrike has denied the allegations and stated it will defend itself against the proposed class action lawsuit. "We believe this case lacks merit and we will vigorously defend the company," a spokesperson told BBC News.
Meanwhile, Delta Air Lines' chief executive, Ed Bastian, reported that the disruption caused by the outage cost the airline $500 million, including lost revenue and compensation to passengers. Delta has reportedly hired a prominent lawyer and is preparing to seek compensation from CrowdStrike.
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