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TechRadar
Craig Hale

Delta CEO says CrowdStrike IT outage will cost airline $500m — as tech firm also sued by shareholders

Crowdstrike logo.

CrowdStrike shareholders have filed a lawsuit against the cybersecurity company following a faulty software update that led millions of devices to crash around the world.

The lawsuit, filed in Austin, Texas, accuses CrowdStrike of making “false and misleading” statements regarding its software testing procedures.

It claims the company’s share price plummeted a staggering 32% within 12 days of the incident, leading to a market value loss of $25 billion.

Shareholders sue CrowdStrike after outage

Subsequently, those who held stock between November 29 and July 29 are seeking unspecified compensation, alleging that executives defrauded investors by falsely assuring them that software updates were thoroughly tested.

On March 5, CEO George Kurtz had stated that the firm’s software was “validated, tested and certified.”

A company person told the BBC: “We believe this case lacks merit and we will vigorously defend the company.”

The issues stemmed from a bug in the system designed to ensure the proper functioning of software updates, which allowed “problematic content data” in a file to go undetected.

On its ongoing incident report page, CrowdStrike declared that virtually all devices had been restored: “Using a week-over-week comparison, ~99% of Windows sensors are online as of July 29 at 5pm PT, compared to before the content update. We typically see a variance of ~1% week-over-week in sensor connections.”

The disruption hit Delta Airlines particularly hard, costing the airline around $500 million in lost revenue and passenger compensation. The company had to cancel more than 5,000 flights and manually reset 40,000 servers.

Delta CEO Ed Bastian has indicated that the airline will seek damages from CrowdStrike, stating: “We have no choice.” The company has reportedly enlisted the help of renowned lawyer David Boies to seek compensation from both CrowdStrike and Microsoft.

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