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New York State Comptroller Tom DiNapoli is leading a class-action lawsuit against cybersecurity company CrowdStrike Holdings, following a massive computer outage last summer. The outage, which disrupted services across banks, airlines, supermarkets, and other industries, was linked to a failed software update from CrowdStrike, costing billions of dollars. The incident led to a significant drop in CrowdStrike's stock value.
DiNapoli is leading the lawsuit on behalf of investors, including the New York State Common Retirement Fund, which serves approximately a million government employees and of which he is a trustee. The pension fund owns $72 million in CrowdStrike stock and reportedly lost between $16.4 million and $16.7 million on its investment between November 29, 2023, and July 19, 2024.
According to CBS6 Albany, DiNapoli's petition states that "CrowdStrike misled investors by falsely touting its safeguards and quality assurance". The petition further alleges that CrowdStrike's failure to follow appropriate testing protocols and procedures led to what has been described as the largest IT outage in history.
The lawsuit, which has been consolidated under the name In Re CrowdStrike Holdings Inc. Securities Litigation, includes other institutional investors such as the Plymouth County (Mass.) Retirement Association. The case is currently being heard by U.S. District Court Judge Robert Pittman in Austin, Texas.