11:45 AM EDT, 07/31/2024 (MT Newswires) -- (Updates to add CrowdStrike's ( CRWD ) response to request for comment in the last two paragraphs.)

CrowdStrike Holdings ( CRWD ) was hit with a federal securities class action complaint stemming from a late-July update to its cybersecurity software that caused a global outage across several industries.

According to the complaint, filed by the Plymouth County Retirement Association in a Texas district court Tuesday, CrowdStrike ( CRWD ) touted that its main product, the Falcon software platform, was "validated, tested, and certified."

The plaintiff alleges those statements were false and misleading because CrowdStrike ( CRWD ) failed to disclose it had "instituted deficient controls in its procedure for updating Falcon and was not properly testing updates to Falcon before rolling them out to customers," according to the complaint. The alleged inadequate testing created risks of major outages, that plaintiff said.

"As a result of these materially false and misleading statements and omissions, CrowdStrike ( CRWD ) stock traded at artificially high prices [between Nov. 29, 2023 and July 29]," the complaint said.

The plaintiff, on behalf of itself and all others similarly situated, is seeking compensatory damages against CrowdStrike ( CRWD ) as well as attorneys' fees and costs incurred from the action.

CrowdStrike ( CRWD ) rejected the allegation.

"We believe this case lacks merit and we will vigorously defend the company," a CrowdStrike ( CRWD ) spokesperson told MT Newswires.

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