July 31 (Reuters) - CrowdStrike ( CRWD ) 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 ( CRWD ) assurances about its technology were materially

false and misleading when a flawed software update disrupted

airlines, banks, hospitals and emergency lines around the world.

They said CrowdStrike's ( CRWD ) share price fell 32% over the next

12 days, wiping out $25 billion of market value, as the outage's

effects became known, Chief Executive George Kurtz was called to

testify to the U.S. Congress, and Delta Air Lines ( DAL )

reportedly hired prominent lawyer David Boies to seek damages.

The complaint cites statements including from a March 5

conference call where Kurtz characterized CrowdStrike's ( CRWD ) software

as "validated, tested and certified."

In a statement on Wednesday, Austin-based CrowdStrike ( CRWD ) said:

"We believe this case lacks merit and we will vigorously defend

the company," Kurtz and Chief Financial Officer Burt Podbere are

also defendants.

The lawsuit led by the Plymouth County Retirement

Association of Plymouth, Massachusetts, seeks unspecified

damages for holders of CrowdStrike Class A shares between Nov.

29, 2023 and July 29, 2024.

Shareholders often sue companies after unexpected negative

news causes stock prices to fall, and CrowdStrike ( CRWD ) could face

more lawsuits.

Delta Chief Executive Ed Bastian told CNBC on Wednesday that

the outage cost his airline $500 million, including lost revenue

and compensation and hotels for stranded fliers.

CrowdStrike ( CRWD ) shares closed on Wednesday down $1.69 at

$231.96. They closed at $343.05 on the day before the outage.

The case is Plymouth County Retirement Association v

CrowdStrike Inc et al, U.S. District Court, Western District of

Texas, No. 24-00857.