NEW YORK, July 31, 2024 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Western District of Texas on behalf of all persons or entities who purchased or otherwise acquired CrowdStrike Holdings, Inc., Inc. (“CrowdStrike” or the “Company”) (NASDAQ: CRWD) securities between November 29, 2023 and July 29, 2024, inclusive (the “Class Period”). The lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.
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 Complaint in the lawsuit alleges that 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. The Complaint further alleges that as a result of these materially false and misleading statements and omissions, CrowdStrike stock traded at artificially high prices during the Class Period.
Additionally, the Complaint alleges that beginning on July 19, 2024, investors learned about critical issues with CrowdStrike’s technology when a single update pushed by CrowdStrike caused outages for millions of users of Microsoft Windows devices worldwide, including financial institutions, government entities, and corporations. Further, the Complaint alleges that CrowdStrike disclosed that the outages had left users vulnerable to potential hacking threats. Further, the Complaint alleges that on this news, shares of CrowdStrike fell $38.09 or 11% to close at $304.96 on July 19, 2024. The Complaint also alleges that then, on July 22, 2024, the fallout of the outages was further revealed as Congress called on Defendant Kurtz to testify regarding the crisis and the Company’s stock rating was downgraded by analysts such as Guggenheim and BTIG. The Complaint further alleges that on this news, shares of CrowdStrike fell $41.05 or 13.5% to close at $263.91 on July 22, 2024.
The Complaint also alleges that investors continued to learn about the legal risks of Defendant’s conduct on July 29, 2024, as news outlets reported that Delta Air Lines had hired prominent attorney David Boies to seek damages from the Company following the outages. The Complaint lastly alleges that on this news, shares of CrowdStrike fell $25.16 or 10%to close at $233.65 on July 30, 2024.
Investors who purchased or otherwise acquired shares of CrowdStrike should contact the Firm prior to the September 30, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
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