CrowdStrike Wins Dismissal of Major Shareholder Lawsuit Over 2024 Global Outage

A U.S. federal judge has dismissed a securities class action lawsuit brought by CrowdStrike shareholders who accused the cybersecurity company of misleading investors about its software testing and quality assurance practices ahead of the massive July 2024 IT disruption.

U.S. District Judge Robert Pitman, sitting in Austin, Texas, ruled that the plaintiffs did not sufficiently demonstrate that CrowdStrike's statements in regulatory filings, earnings calls, and on its website were materially false or misleading, nor did they establish a strong inference of intent to defraud on the part of the company or its executives.

The lawsuit, led by New York State Comptroller Thomas DiNapoli on behalf of the state's pension fund, claimed CrowdStrike lacked proper test plans and a dedicated quality assurance team. Plaintiffs cited former employee statements alleging that executives prioritized speed and profit over rigorous procedures. While the judge noted two statements related to compliance with federal security requirements (including those from the Department of Defense) as potentially questionable, he concluded the overall allegations fell short of proving fraudulent intent.

CrowdStrike's chief legal officer, Cathleen Anderson, welcomed the decision, stating: "We appreciate the court's thoughtful consideration and decision to dismiss this case."A spokesman for Comptroller DiNapoli indicated the ruling is under review, with the possibility of amending the complaint.

Recap of the July 2024 Outage

The case stems from a flawed content update to CrowdStrike's Falcon endpoint detection platform released on July 19, 2024. The defective update triggered widespread crashes on more than 8 million Microsoft Windows systems, displaying the infamous "blue screen of death" and forcing endless reboots.

The incident caused major operational chaos across critical sectors, grounding flights, halting banking services, disrupting hospitals, and affecting emergency response systems.

Airlines were among the hardest hit. Delta Air Lines reported approximately $500 million in losses and canceled over 7,000 flights. CrowdStrike's stock price dropped 32% in the 11 days following the outage, erasing about $25 billion in market value.

Ongoing Legal Landscape

This dismissal marks a significant legal victory for CrowdStrike in shareholder litigation, but the company continues to face other claims related to the incident. In May 2025, a Georgia state judge permitted Delta Air Lines to advance most of its separate lawsuit against CrowdStrike, focusing on allegations of gross negligence and breach of contract rather than securities fraud.In June 2025, Judge Pitman previously dismissed a related class action brought by affected airline passengers, a decision currently under appeal.