CrowdStrike (CRWD.O), 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 assurances about its technology were materially false and misleading when a flawed software update disrupted airlines, banks, hospitals and emergency lines around the world.
Basically, the company advertised itself as being one way to the shareholders, they bought in on that basis, and then it turned out they were misrepresenting themselves. Presumably they’re suing the company and not the executives personally because that’s where the money is.
Note that simply owning the shares doesn’t mean that it’s already “their money.” If I buy a share in a company I can’t walk up to it and demand that they give me a portion of the cash from the register. It’s more complicated than that and lawsuits like this are part of that complexity.
How does that make any sense? They’re suing themselves….
Shareholders are invested by their money only. If they can sue and win while also selling off their shares they’re going to do it.
Basically, the company advertised itself as being one way to the shareholders, they bought in on that basis, and then it turned out they were misrepresenting themselves. Presumably they’re suing the company and not the executives personally because that’s where the money is.
Note that simply owning the shares doesn’t mean that it’s already “their money.” If I buy a share in a company I can’t walk up to it and demand that they give me a portion of the cash from the register. It’s more complicated than that and lawsuits like this are part of that complexity.