A lawsuit has been filed against CrowdStrike by shareholders who said the cybersecurity company deceived them by concealing how inadequate software testing could lead to the global service interruption on July 19 that caused over 8 million computers to crash.

In a proposed class action filed last Tuesday evening in federal court in Austin, Texas, shareholders stated that they learned CrowdStrike's claims about its technology were materially false and misleading when a faulty software update disrupted airlines, banks, hospitals, and emergency lines around the world.

They said CrowdStrike's stock price fell by 32% in the 12 days that followed, wiping out $25 billion in market value, when the effects of the outage became known. CEO George Kurtz was called to testify before the U.S. Congress, and Delta Airlines reportedly hired prominent attorney David Boies for damages.

The complaint cites statements including from a conference call on March 5, where Kurtz described the CrowdStrike program as “validated, tested, and certified.”

In a statement issued yesterday, Wednesday, Austin-based CrowdStrike said: “We believe this case lacks merit and will vigorously defend the company,” and Kurtz and CFO Burt Podbere are also named.

The lawsuit filed by the Plymouth County Retirement Association in Plymouth, Massachusetts, seeks unspecified damages for CrowdStrike Class A shareholders during the period from November 29, 2023, to July 29, 2024.

Shareholders often sue companies after unexpected negative news leads to a drop in stock prices, and CrowdStrike may face further lawsuits.

Ed Bastian, CEO of Delta, told CNBC on Wednesday that the outage cost his airline $500 million, including lost revenue, compensations, and hotels for stranded passengers.

CrowdStrike shares closed down $1.69 on Wednesday at $231.96. They closed at $343.05 the day before the outage.