A cyber security firm, CrowdStrike, is facing a lawsuit from investors who claim to have been misled about the quality of its software after a pension fund claimed that the technology had not been properly tested, causing a massive computer outage. CrowdStrike has denied these allegations and vows to fight the lawsuit.

It's trouble of the legal kind for CrowdStrike, a famous cybersecurity company. The company finds itself on the receiving end of a lawsuit filed by a Texas-based pension fund, the Plymouth County Retirement Association. The company is accused of misleading its investors by stating that its technology was tested and validated, alleged the lawsuit, months after a far-flung computer outage in July affected many businesses worldwide.

It represents a class action lawsuit of investors who feel wronged by CrowdStrike. Investors believe CrowdStrike did not come clean about the quality of its software, and it has cost them dearly. Specifically, the lawsuit says CrowdStrike pushed updates to its Falcon software without first testing them properly. This poor testing was supposedly responsible for the large outage, which cost the company both its reputation and a stock price drop.

There are three major points of contention in this lawsuit by the pension fund:

1. Insufficient Testing: CrowdStrike did not adequately test updates to its Falcon software before releasing them.
2. High Outage Risk: Because of inadequate testing, there was a high risk of significant outages for many of CrowdStrike's customers.
3. Financial and Reputational Damage: The outages did damage to CrowdStrike's brand and opened the company to legal and financial exposure.

Because of this, a lawsuit alleges CrowdStrike's stock price was inflated until an outage exposed the flaws in the software and the stock price fell. Investors say CrowdStrike misled them about the actual state of its technology and potential risk the company incurred.

CrowdStrike has recently come out to respond to the allegations, arguing that it lacks merit. The company's spokesperson said, "We believe this case lacks merit and we will vigorously defend the company."

In addition to this lawsuit by investors, CrowdStrike faces further legal ramifications because of this outage. One of the worst-hit firms was Delta Air Lines. The CEO of Delta, Ed Bastian, estimated the outage cost his company a whopping $500 million. Of course, this massive financial hit was directly attributed to the cancellation of over 5,000 flights in what significantly disrupted the travel plans of many travelers.

If you're going to be having access, priority access to the Delta ecosystem in terms of technology, you've got to test the stuff," Bastian exclaimed. "You can't come into a mission-critical 24/7 operation and tell us we have a bug." Bastian also claimed he should have shielded Delta's shareholders, customers, and employees from this kind of expensive disruption.

The impact of the outage stretched well beyond Delta Air Lines. It is estimated that the crash impacted roughly 1 percent of all the Windows PCs worldwide. The outage came with a heavy toll on financial damages in the tune of $5 billion amongst the Fortune 500 companies, which are some of the biggest businesses in the United States.

Despite the disruption and losses, CrowdStrike offered its team members and partners who participated in fixing an outage $10 UberEats gift vouchers. The move was blocked within moments by Uber due to concerns about fraud.

Cases like CrowdStrike are not the first of their kind when the stock price for a company plummets over an unknown issue. Investors argue that they didn't have the full picture, and this lack of disclosure is a form of fraud. In CrowdStrike's case, it will be upon the lawsuit to decide whether the company indeed misled investors on the quality of its software.

As this legal fight ensues, CrowdStrike will have to respond to such serious allegations and still fight to retain the confidence of their customers and investors. The judgment arising from this case may majorly affect the company's future operations.