Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 1 of 29

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

PLYMOUTH COUNTY RETIREMENT

ASSOCIATION, Individually and on Behalf of All
Others Similarly Situated, Civil Action No. 24-cv-857

Plaintiff,
CLASS ACTION
v.
DEMAND FOR JURY TRIAL
CROWDSTRIKE HOLDINGS, INC., GEORGE
KURTZ, and BURT W. PODBERE,

Defendants.

CLASS ACTION COMPLAINT FOR VIOLATIONS

OF THE FEDERAL SECURITIES LAW
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I. INTRODUCTION

Plaintiff Plymouth County Retirement Association (“Plaintiff”), individually and on behalf

of all others similarly situated, allege the following based upon personal knowledge as to Plaintiff’s

own acts and upon information and belief as to all other matters based on the investigation

conducted by and through counsel, which included, among other things, a review of the public

U.S. Securities and Exchange Commission (“SEC”) filings of CrowdStrike Holdings, Inc.

(“CrowdStrike” or the “Company”), Company press releases, conference call transcripts, investor

presentations, analyst and media reports, and other public reports and information regarding the

Company. Plaintiff believes that substantial additional evidentiary support exists for the

allegations set forth herein, which evidence will be developed after a reasonable opportunity for

discovery.

II. NATURE OF THE ACTION

1. This is a federal securities class action on behalf of a class of all persons and entities

who purchased or otherwise acquired CrowdStrike Class A common stock between November 29,

2023 and July 29, 2024, inclusive (the “Class Period”), seeking to pursue remedies under Sections

10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and SEC Rule 10b-

5, promulgated thereunder.

2. CrowdStrike, headquartered in Austin, Texas, is a global cybersecurity company

that provides software that helps prevent data breaches. CrowdStrike’s customers are major

corporations across several industries including airlines, banks, hospitals, and telecommunications

providers as well as government entities. CrowdStrike’s main product is the Falcon software

platform, which purportedly uses artificial intelligence and machine learning technologies to

detect, prevent, and respond to security breach threats. The Falcon software is embedded in the

computers of CrowdStrike’s customers and requires constant updates.

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3. Throughout the Class Period, Defendants (defined herein) repeatedly touted the

efficacy of the Falcon platform while assuring investors that CrowdStrike’s technology was

“validated, tested, and certified.” This complaint alleges that these statements were false and

misleading because Defendants had failed to disclose that: (1) CrowdStrike had instituted deficient

controls in its procedure for updating Falcon and was not properly testing updates to Falcon before

rolling them out to customers; (2) this inadequate software testing created a substantial risk that an

update to Falcon could cause major outages for a significant number of the Company’s customers;

and (3) such outages could pose, and in fact ultimately created, substantial reputational harm and

legal risk to CrowdStrike. As a result of these materially false and misleading statements and

omissions, CrowdStrike stock traded at artificially high prices during the Class Period.

4. Beginning on July 19, 2024, investors learned about critical issues with

CrowdStrike’s technology when a single update pushed by CrowdStrike caused outages for

millions of users of Microsoft Windows devices worldwide, including financial institutions,

government entities, and corporations (the “CrowdStrike Outage”). Further, CrowdStrike

disclosed that the outages had left users vulnerable to potential hacking threats. On this news,

shares of CrowdStrike fell $38.09, or 11%, to close at $304.96 on July 19, 2024

5. Then, on July 22, 2024, the fallout of the CrowdStrike outage was further revealed

as Congress called on Defendant Kurtz to testify regarding the crisis and the Company’s stock

rating was downgraded by analysts such as Guggenheim and BTIG. On this news, shares of

CrowdStrike fell $41.05, or 13.5%, to close at $263.91 on July 22, 2024.

6. Investors continued to learn about the legal risk Defendants had concealed on July

29, 2024, as news outlets reported that Delta Air Lines had hired prominent attorney David Boies

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to seek damages from the Company following the CrowdStrike Outage. On this news, shares of

CrowdStrike fell $25.16, or 10%, to close at $233.65 on July 30, 2024.

7. These stock declines following the disclosure of Defendants’ fraud caused

substantial damages to the Company’s investors.

8. Since the CrowdStrike Outage, public commentary from cybersecurity experts has

provided evidence that CrowdStrike was taking insufficient precautions regarding such updates,

including running insufficient tests.

III. JURISDICTION AND VENUE

9. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the

SEC, 17 C.F.R. § 240.10b-5.

10. This Court has jurisdiction over the subject matter of this action under 28 U.S.C. §

1331 and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

11. Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. §

78aa, and 28 U.S.C. § 1391(b), because CrowdStrike is headquartered in this District, and because

many of the acts and conduct that constitute the violations of law complained of herein, including

the dissemination to the public of materially false and misleading information, occurred in this

District.

12. In connection with the acts alleged in this complaint, Defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not limited

to, the mails, interstate telephone communications, and the facilities of the national securities

markets.

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IV. PARTIES

13. As indicated on the Certification attached herewith, Plaintiff purchased shares of

CrowdStrike stock during the Class Period and suffered damages as a result of the violations of

the federal securities laws alleged herein.

14. Defendant CrowdStrike is incorporated in Delaware and headquartered in Austin,

Texas. CrowdStrike common stock trades on the NASDAQ under the ticker symbol “CRWD.”

15. Defendant George Kurtz was the chief executive officer and President of

CrowdStrike at all relevant times.

16. Defendant Burt W. Podbere was the chief financial officer of CrowdStrike at all

relevant times.

17. Defendants Kurtz and Podbere are collectively referred to as the “Individual

Defendants.” The Individual Defendants, because of their positions with the Company, possessed

the power and authority to control the contents of CrowdStrike’s reports to the SEC, press releases,

and presentations to securities analysts, money and portfolio managers, and institutional investors,

i.e., the market. Each Individual Defendant was provided with copies of the Company’s reports

alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and

opportunity to prevent their issuance or cause them to be corrected. Because of their positions and

access to material non-public information available to them, each of the Individual Defendants

knew that the adverse facts specified herein had not been disclosed to, and/or were being concealed

from, the public, and that the positive representations that were being made were then materially

false and/or misleading.

18. CrowdStrike and the Individual Defendants are collectively referred to herein as

“Defendants.”

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19. CrowdStrike is liable for the acts of the Individual Defendants, and its employees

under the doctrine of respondeat superior and common law principles of agency as all the wrongful

acts complained of herein were carried out within the scope of their employment with

authorization.

20. The scienter of the Individual Defendants, and other employees and agents of the

Company are similarly imputed to CrowdStrike under respondeat superior and agency principles.

V. COMPANY BACKGROUND

21. Founded in 2011, CrowdStrike is incorporated in Delaware and headquartered in

Austin, Texas. CrowdStrike is a global cybersecurity company that provides software that helps

prevent data breaches. CrowdStrike’s customers are major corporations across several industries

including airlines, banks, hospitals, and telecommunications providers as well as government

entities.

22. CrowdStrike’s main product is the Falcon software platform, which purportedly

uses artificial intelligence and machine learning technologies to detect, prevent, and respond to

security breach threats. CrowdStrike claims that the key to the Company’s technological and

business advantages is that Falcon can keep pace with cybersecurity threats through rapid

innovation. CrowdStrike claims this platform constantly gathers data and analyzes cybersecurity

events to “create actionable data, identify shifts in adversary tactics, and automatically prevent

threats in real-time across our customer base.” CrowdStrike further claims its platform is

“continuously improv[ing],” to “keep customers ahead of changing adversary tactics.”

23. The Falcon software is embedded in the computers of CrowdStrike’s customers and

requires constant updates. CrowdStrike updates its Falcon platform in at least two ways. First,

there are “Sensor Content” updates that directly update Falcon’s sensor. Second, there are “Rapid

Response Content” updates that update how those sensors behave in trying to detect threats.

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VI. MATERIAL MISREPRESENTATIONS AND OMISSIONS DURING THE CLASS

PERIOD

24. The Class Period begins on November 29, 2023, the day after CrowdStrike

announced its financial results for the third quarter of fiscal year 2024. 1 In connection with the

release of these results, Defendants participated in a related earnings call with analysts and

investors. On that call, Defendant Kurtz touted Falcon, claiming it “has made cybersecurity easy

and effective for small businesses to the world’s largest enterprises” and that the “drumbeat of

innovation was loud and clear with multiple releases and announcements showcasing CrowdStrike

as the XDR leader, including the Falcon platform Raptor release.” Defendant Kurtz claimed that

“from hygiene to patching, Falcon for IT lets customers consolidate multiple use cases and replace

legacy products with our single-agent architecture,” and touted the Company’s “new Falcon Data

Protection module that liberates customers from legacy [data loss prevention] products with

modern, frictionless data security.”

25. Also on November 29, 2023, the Company filed with the SEC a Form 10-Q

reporting the Company’s financial and operational results for the third quarter of fiscal year 2024

ended October 31, 2023 (the “Q3 2024 10-Q”).

26. The Q3 2024 10-Q identified risk factors to the Company’s business, including:

If our solutions fail or are perceived to fail to detect or prevent

incidents or have or are perceived to have defects, errors, or
vulnerabilities, our brand and reputation would be harmed, which
would adversely affect our business and results of operations.

Real or perceived defects, errors or vulnerabilities in our Falcon

platform and cloud modules, the failure of our platform to detect or
prevent incidents, including advanced and newly developed attacks,
misconfiguration of our solutions, or the failure of customers to take
action on attacks identified by our platform could harm our

1
CrowdStrike’s fiscal year ends on January 31 each year.

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reputation and adversely affect our business, financial position and

results of operations.

...

We rely on third-party data centers, such as Amazon Web Services,

and our own colocation data centers to host and operate our
Falcon platform, and any disruption of or interference with our
use of these facilities may negatively affect our ability to maintain
the performance and reliability of our Falcon platform which
could cause our business to suffer.

Our customers depend on the continuous availability of our Falcon

platform. We currently host our Falcon platform and serve our
customers using a mix of third-party data centers, primarily Amazon
Web Services, Inc., or AWS, and our data centers, hosted in
colocation facilities. Consequently, we may be subject to service
disruptions as well as failures to provide adequate support for
reasons that are outside of our direct control. We have experienced,
and expect that in the future we may experience interruptions, delays
and outages in service and availability from time to time due to a
variety of factors, including infrastructure changes, human or
software errors, website hosting disruptions and capacity
constraints.

The following factors, many of which are beyond our control, can
affect the delivery, availability, and the performance of our Falcon
platform:

...

• errors, defects or performance problems in our software,

including third-party software incorporated in our software;

• improper deployment or configuration of our solutions;

• the failure of our redundancy systems, in the event of a service

disruption at one of our data centers, to provide failover to other
data centers in our data center network; and

• the failure of our disaster recovery and business continuity

arrangements.

The adverse effects of any service interruptions on our reputation,

results of operations, and financial condition may be
disproportionately heightened due to the nature of our business and
the fact that our customers have a low tolerance for interruptions of
any duration. Interruptions or failures in our service delivery could

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result in a cyberattack or other security threat to one of our

customers during such periods of interruption or failure.
Additionally, interruptions or failures in our service could cause
customers to terminate their subscriptions with us, adversely affect
our renewal rates, and harm our ability to attract new customers.
Our business would also be harmed if our customers believe that a
cloud-based SaaS-delivered endpoint security solution is unreliable.
While we do not consider them to have been material, we have
experienced, and may in the future experience, service interruptions
and other performance problems due to a variety of factors. The
occurrence of any of these factors, or if we are unable to rapidly and
cost-effectively fix such errors or other problems that may be
identified, could damage our reputation, negatively affect our
relationship with our customers or otherwise harm our business,
results of operations and financial condition.

(emphasis in original).

27. Appended as an exhibit to the Q3 2024 10-Q were signed certifications pursuant to

the Sarbanes-Oxley Act of 2002 (“SOX”), wherein the Individual Defendants certified that “[t]he

[Q3 2024 10-Q] fully complies with the requirements of Section 13(a) or 15(d) of the [Exchange

Act]” and that the “information contained in the [Q3 2024 10-Q] fairly presents, in all material

respects, the financial condition and results of operations of [the Company].”

28. Then, on March 5, 2024, the Company announced its financial results for its fiscal

year 2024 ended January 31, 2024. As part of these results, Defendants participated in a related

earnings call the same day. On that call, Defendant Kurtz again touted Falcon, claiming it “is

validated, tested and certified.” Defendant Kurtz also highlighted CrowdStrike’s “execution and

discipline across the business.”

29. Then, on March 7, 2024, the Company filed with the SEC a Form 10-K reporting

the Company’s financial and operational results for the fiscal year 2024 ended January 31, 2024

(the “2024 10-K”).

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30. The 2024 10-K stated:

We offer our customers compelling business value that includes

ease of adoption, rapid time-to-value, superior efficacy rates in
detecting threats and preventing breaches, and reduced total cost of
ownership by consolidating legacy, siloed, and multi-agent security
products in a single solution. We also allow thinly-stretched
security organizations to automate previously manual tasks, freeing
them to focus on their most important objectives. With the Falcon
platform, organizations can transform how they combat threats,
transforming from slow, manual, and reactionary to fast, automated,
and predictive, while gaining visibility across the threat lifecycle.

Key benefits of our approach and the CrowdStrike Falcon platform

include:

...

•High Efficacy, Low False Positives: The vast telemetry of the

Security Cloud and the best practices employed in continually
training our AI models results in industry-leading efficacy rates and
low false positives.

•Consolidation of Siloed Products: Integrating and maintaining

numerous security products creates blind spots that attackers can
exploit, is costly to maintain and negatively impacts user
performance. Our cloud-native platform approach gives customers
a unified approach to address their most critical areas of risk
seamlessly. We empower customers to rapidly deploy and scale
industry leading technologies across endpoint detection and
response (“EDR”) and Extended Detection and Response (“XDR”),
Identity Threat Protection, Threat Intelligence, Exposure
Management, Cloud Security, Application Security Posture
Management, Next-Generation SIEM and Modern Log
Management, and IT Automation from a single platform.

•Reducing Agent Bloat: Our single intelligent lightweight agent

enables frictionless deployment of our platform at scale, enabling
customers to rapidly adopt our technology across any type of
workload running on a variety of endpoints. The agent is non-
intrusive to the end user, requires no reboots and continues to protect
the endpoint and track activity even when offline. Through our
single lightweight agent approach, customers can adopt multiple
platform modules to address their critical areas of risk without
burdening the endpoint with multiple agents. Legacy approaches
often require multiple agents as they layer on new capabilities. This
can severely impact user performance and create barriers to security.

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•Rapid Time to Value: Our cloud-native platform was built to

rapidly scale industry leading protection across the entire enterprise,
eliminating lengthy implementation periods and professional
services engagements that next-gen and legacy competitors may
require. Our single agent, collect once and re-use many times
approach enables us to activate new modules in real time.

•Elite Security Teams as a Force Multiplier: As adversaries continue

to employ sophisticated malwareless attacks that exploit user
credentials and identities, automation and autonomous security are
no longer sufficient on their own. Stopping today’s sophisticated
attacks requires a combination of powerful automation and elite
threat hunting. Falcon Complete provides a comprehensive
monitoring, management, response, and remediation solution to our
customers and is designed to bring enterprise level security to
companies that may lack enterprise level resources.

CrowdStrike Falcon OverWatch, part of CrowdStrike Counter

Adversary Operations, combines world-class human intelligence
from our elite security experts with the power of the Falcon
platform. OverWatch is a force multiplier that extends the
capabilities and improves the productivity of our customers’
security teams. Because our world-class team can see attacks across
our entire customer base, their expertise is enhanced by their
constant visibility into the threat landscape. Additionally, the
insights of our OverWatch team can then be leveraged by the Falcon
platform to further enhance its autonomous capabilities, creating a
positive feedback loop for our customers.

•Alleviating the Skills Shortage through Automation: CrowdStrike

automates manual tasks to free security teams to focus on their most
important job – stopping the breach. Our Falcon Fusion capability
automates workflows to reduce the need to switch between different
security tools and tasks, while our Falcon Insight XDR module
provides a unified solution that enables security teams to rapidly and
efficiently identify, hunt, and eliminate threats across multiple
security domains using first and third party datasets.

•Lower Total Cost of Ownership: Our cloud-native platform

eliminates our customers’ need for initial or ongoing purchases of
hardware and does not require their personnel to configure,
implement or integrate disparate point products. Additionally, our
comprehensive platform reduces overall personnel costs associated
with ongoing maintenance, as well as the need for software patches
and upgrades for separate products.

...

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Our research and development organizations are responsible for the

design, architecture, operation and quality of our cloud native
Falcon platform. In addition, the research and development
organizations work closely with our customer success teams to
promote customer satisfaction.

Our success is a result of our continuous drive for innovation. Our

internal team of security experts, researchers, intelligence analysts,
and threat hunters continuously analyzes the evolving global threat
landscape to develop products that defend against today’s most
sophisticated and stealthy attacks and report on emerging security
issues. We invest substantial resources in research and development
to enhance our Falcon platform, and develop new cloud modules,
features and functionality. We believe timely development of new,
and enhancement of our existing products, services, and features is
essential to maintaining our competitive position. We work closely
with our customers and channel partners to gain valuable insight into
their security management practices to assist us in designing new
cloud modules and features that extend the capability of our
platform. Our technical staff monitors and tests our software on a
regular basis, and we also make our Falcon platform available for
third-party validation. We also maintain a regular release process to
update and enhance our existing solutions. In addition, we engage
security consulting firms to perform periodic vulnerability analysis
of our solutions.

...

Our cybersecurity risk management program, which includes data

privacy, product security, and information security, is designed to
align with our industry’s best practices.

(emphasis in original).

31. The 2024 10-K also identified risk factors to the Company’s business, including:

If our solutions fail or are perceived to fail to detect or prevent

incidents or have or are perceived to have defects, errors, or
vulnerabilities, our brand and reputation would be harmed, which
would adversely affect our business and results of operations.

Real or perceived defects, errors or vulnerabilities in our Falcon

platform and cloud modules, the failure of our platform to detect or
prevent incidents, including advanced and newly developed attacks,
misconfiguration of our solutions, or the failure of customers to take
action on attacks identified by our platform could harm our

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reputation and adversely affect our business, financial position and

results of operations.

...

We rely on third-party data centers, such as Amazon Web Services,

and our own colocation data centers to host and operate our
Falcon platform, and any disruption of or interference with our
use of these facilities may negatively affect our ability to maintain
the performance and reliability of our Falcon platform which
could cause our business to suffer.

Our customers depend on the continuous availability of our Falcon

platform. We currently host our Falcon platform and serve our
customers using a mix of third-party data centers, primarily Amazon
Web Services, Inc., or AWS, and our data centers, hosted in
colocation facilities. Consequently, we may be subject to service
disruptions as well as failures to provide adequate support for
reasons that are outside of our direct control. We have experienced,
and expect that in the future we may experience interruptions, delays
and outages in service and availability from time to time due to a
variety of factors, including infrastructure changes, human or
software errors, website hosting disruptions and capacity
constraints.

The following factors, many of which are beyond our control, can
affect the delivery, availability, and the performance of our Falcon
platform:

...

• errors, defects or performance problems in our software,

including third-party software incorporated in our software;

• improper deployment or configuration of our solutions;

• the failure of our redundancy systems, in the event of a service

disruption at one of our data centers, to provide failover to other
data centers in our data center network; and

• the failure of our disaster recovery and business continuity

arrangements.

The adverse effects of any service interruptions on our reputation,

results of operations, and financial condition may be
disproportionately heightened due to the nature of our business and
the fact that our customers have a low tolerance for interruptions of
any duration. Interruptions or failures in our service delivery could

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result in a cyberattack or other security threat to one of our

customers during such periods of interruption or failure.
Additionally, interruptions or failures in our service could cause
customers to terminate their subscriptions with us, adversely affect
our renewal rates, and harm our ability to attract new customers. Our
business would also be harmed if our customers believe that a cloud-
based SaaS-delivered endpoint security solution is unreliable. While
we do not consider them to have been material, we have
experienced, and may in the future experience, service interruptions
and other performance problems due to a variety of factors. The
occurrence of any of these factors, or if we are unable to rapidly and
cost-effectively fix such errors or other problems that may be
identified, could damage our reputation, negatively affect our
relationship with our customers or otherwise harm our business,
results of operations and financial condition.

(emphasis in original).

32. Appended as an exhibit to the 2024 10-K were signed certifications pursuant to

SOX, wherein the Individual Defendants certified that “[t]he [2024 10-K] fully complies with the

requirements of Section 13(a) or 15(d) of the [Exchange Act]” and that the“information contained

in the [2024 10-K] fairly presents, in all material respects, the financial condition and results of

operations of [the Company].”

33. Also on March 7, 2024, Defendant Kurtz spoke at the Morgan Stanley Technology,

Media & Telecom Conference. During that conference, he claimed it was “friction-free to deploy

[CrowdStrike’s product].”

34. Then, on June 5, 2024, the Company filed with the SEC a Form 10-Q reporting the

Company’s financial and operational results for the first quarter of fiscal year 2025 ended April

30, 2024 (the “Q1 2025 10-Q”).

35. The Q1 2025 10-Q identified risk factors to the Company’s business, including:

If our solutions fail or are perceived to fail to detect or prevent

incidents or have or are perceived to have defects, errors, or
vulnerabilities, our brand and reputation would be harmed, which
would adversely affect our business and results of operations.

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Real or perceived defects, errors or vulnerabilities in our Falcon

platform and cloud modules, the failure of our platform to detect or
prevent incidents, including advanced and newly developed attacks,
misconfiguration of our solutions, or the failure of customers to take
action on attacks identified by our platform could harm our
reputation and adversely affect our business, financial position and
results of operations.

...

We rely on third-party data centers, such as Amazon Web Services,

and our own colocation data centers to host and operate our
Falcon platform, and any disruption of or interference with our
use of these facilities may negatively affect our ability to maintain
the performance and reliability of our Falcon platform which
could cause our business to suffer.

Our customers depend on the continuous availability of our Falcon

platform. We currently host our Falcon platform and serve our
customers using a mix of third-party data centers, primarily Amazon
Web Services, Inc., or AWS, and our data centers, hosted in
colocation facilities. Consequently, we may be subject to service
disruptions as well as failures to provide adequate support for
reasons that are outside of our direct control. We have experienced,
and expect that in the future we may experience interruptions, delays
and outages in service and availability from time to time due to a
variety of factors, including infrastructure changes, human or
software errors, website hosting disruptions and capacity
constraints.

The following factors, many of which are beyond our control, can
affect the delivery, availability, and the performance of our Falcon
platform:

...

• errors, defects or performance problems in our software,

including third-party software incorporated in our software;

• improper deployment or configuration of our solutions;

• the failure of our redundancy systems, in the event of a service

disruption at one of our data centers, to provide failover to other
data centers in our data center network; and

• the failure of our disaster recovery and business continuity

arrangements.

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The adverse effects of any service interruptions on our reputation,

results of operations, and financial condition may be
disproportionately heightened due to the nature of our business and
the fact that our customers have a low tolerance for interruptions of
any duration. Interruptions or failures in our service delivery could
result in a cyberattack or other security threat to one of our
customers during such periods of interruption or failure.
Additionally, interruptions or failures in our service could cause
customers to terminate their subscriptions with us, adversely affect
our renewal rates, and harm our ability to attract new customers.
Our business would also be harmed if our customers believe that a
cloud-based SaaS-delivered endpoint security solution is unreliable.
While we do not consider them to have been material, we have
experienced, and may in the future experience, service interruptions
and other performance problems due to a variety of factors. The
occurrence of any of these factors, or if we are unable to rapidly and
cost-effectively fix such errors or other problems that may be
identified, could damage our reputation, negatively affect our
relationship with our customers or otherwise harm our business,
results of operations and financial condition.

(emphasis in original).

36. Appended as an exhibit to the Q1 2025 10-Q were signed certifications pursuant to

SOX, wherein the Individual Defendants certified that “[t]he [Q1 2025 10-Q] fully complies with

the requirements of Section 13(a) or 15(d) of the [Exchange Act]” and that the “information

contained in the [Q1 2025 10-Q] fairly presents, in all material respects, the financial condition

and results of operations of the [Company].”

37. The statements in ¶¶24-36 were materially false and misleading when made

because, throughout the Class Period, Defendants had failed to disclose that: (1) CrowdStrike had

instituted deficient controls in its procedure for updating Falcon, and was not properly testing

updates to Falcon before rolling them out to customers; (2) this inadequate software testing created

a substantial risk that an update to Falcon could cause major outages for a significant number of

the Company’s customers; and (3) such outages could pose, and in fact ultimately created,

substantial reputational harm and legal risk to CrowdStrike.

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VII. THE TRUTH EMERGES

38. Investors began to learn the truth behind Defendants’ misrepresentations on July

19, 2024, when news broke that a flawed Falcon content update caused major worldwide

technology outages for millions of devices running Microsoft Windows (the “CrowdStrike

Outage”). About 8.5 million Windows devices were affected by this outage. Victims of the

CrowdStrike Outage included both large corporations and government entities. Among several

other consequences of the CrowdStrike Outage, airlines were forced to ground countless flights

and emergency 911 hotlines were inoperable. The flawed update responsible for the CrowdStrike

Outage occurred in its Rapid Response Content file. CrowdStrike also informed its customers that

bad actors were trying to exploit the CrowdStrike Outage to hack CrowdStrike customers. The

CrowdStrike Outage subjected CrowdStrike to substantial legal liability and massive reputational

damages. On this news, shares of CrowdStrike fell $38.09, or 11%, to close at $304.96 on July

19, 2024.

39. Then, on July 22, 2024, the reputational harm and legal risk imposed on

CrowdStrike by the outage was further revealed as Congress called on Defendant Kurtz to testify

regarding the crisis and the Company’s stock rating was downgraded by analysts such as

Guggenheim and BTIG. On this news, shares of CrowdStrike fell $41.05, or 13.5%, to close at

$263.91 on July 22, 2024.

40. Investors continued to learn about the legal risk Defendants had concealed on July

29, 2024, as news outlets reported that Delta Air Lines had hired prominent attorney David Boies

to seek damages from the Company following the CrowdStrike Outage. On this news, shares of

CrowdStrike fell $25.16, or 10%, to close at $233.65 on July 30, 2024.

41. Since the CrowdStrike Outage, publicly revealed evidence indicates that

CrowdStrike was taking insufficient precautions regarding such updates. For instance,

16
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 18 of 29

CrowdStrike has promised to take remedial measures to ensure that such a crash does not happen

again, including implementing a so-called canary deployment of such updates, meaning a

progressive rollout that starts with a subset of users. This indicates CrowdStrike was not taking

such measures prior to the CrowdStrike Outage.

42. Expert commentary since the outage has also provided evidence of CrowdStrike’s

poor safety procedures. For instance, The Verge commented that CrowdStrike appears not to do

as much thorough testing on its Rapid Response Content updates as it does on other updates. An

expert quoted by The Verge stated that “[i]f CrowdStrike had properly tested its content updates,”

the CrowdStrike Outage would likely not have occurred.

43. Similarly, a cybersecurity expert cited by Forbes criticized CrowdStrike’s quality

assurance procedures and stated that “there’s no absolving CrowdStrike from responsibility of this

incident.” An expert cited by The Washington Post said it was “alarming” that the CrowdStrike

update was not “tested and validated” before it was implemented.

VIII. CLASS ACTION ALLEGATIONS

44. Plaintiff brings this class action under Federal Rule of Civil Procedure 23 on behalf

of themselves and a class of all persons and entities who purchased or otherwise acquired

CrowdStrike stock during the Class Period (the “Class”). Excluded from the Class are Defendants,

their agents, directors and officers of CrowdStrike, and their families and affiliates.

45. The members of the Class are so numerous that joinder of all members is

impracticable. The disposition of their claims in a class action will provide substantial benefits to

the parties and the Court. As of May 30, 2024, there were approximately 231 million shares of

CrowdStrike Class A common stock outstanding, owned by thousands of investors. Throughout

the Class Period, CrowdStrike stock was actively traded on the NASDAQ. While the exact number

of Class members is unknown to Plaintiff at this time and can be ascertained only through

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 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 19 of 29

appropriate discovery, Plaintiff believes that there are thousands of members in the proposed Class.

Record owners and other members of the Class may be identified from records maintained by

CrowdStrike or its transfer agent and may be notified of the pendency of this action by mail, using

the form of notice similar to that customarily used in securities class actions.

46. There is a well-defined community of interest in the questions of law and fact

involved in this case. Questions of law and fact common to the members of the Class, which

predominate over questions which may affect individual Class members, include:

(a) Whether Defendants violated the Exchange Act;

(b) Whether Defendants omitted and/or misrepresented material facts;

(c) Whether Defendants’ statements omitted material facts necessary in order

to make the statements made, in light of the circumstances under which they were made, not

misleading;

(d) Whether Defendants knew or recklessly disregarded that their statements

were false and misleading;

(e) Whether the price of CrowdStrike stock was artificially inflated; and

(f) The extent of damage sustained by members of the Class and the

appropriate measure of damages.

47. Plaintiff’s claims are typical of those of the Class because Plaintiff and the Class

sustained damages from Defendants’ wrongful conduct.

48. Plaintiff will adequately protect the interests of the Class and has retained counsel

who are experienced in securities class actions. Plaintiff has no interests that conflict with those

of the Class.

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 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 20 of 29

49. A class action is superior to other available methods for the fair and efficient

adjudication of this controversy. Joinder of all Class members is impracticable.

IX. ADDITIONAL SCIENTER ALLEGATIONS

50. As alleged herein, Defendants acted with scienter in that Defendants knew, or

recklessly disregarded, that the documents and public statements they issued and disseminated to

the investing public in the name of the Company, or in their own name, during the Class Period

were materially false and misleading. Defendants knowingly and substantially participated or

acquiesced in the issuance or dissemination of such statements and documents as primary

violations of the federal securities laws. Defendants, by virtue of their receipt of information

reflecting the true facts regarding CrowdStrike, and their control over and/or receipt and/or

modification of CrowdStrike’s materially false and misleading statements, were active and

culpable participants in the fraudulent scheme alleged herein.

51. Defendants knew or recklessly disregarded the false and misleading nature of the

information they caused to be disseminated to the investing public. The fraudulent scheme

described herein could not have been perpetrated during the Class Period without the knowledge

and complicity of, or at least the reckless disregard by, personnel at the highest levels of the

Company, including the Individual Defendants.

52. The Individual Defendants, because of their positions with CrowdStrike, controlled

the contents of CrowdStrike’s public statements during the Class Period. The Individual

Defendants were each provided with or had access to the information alleged herein to be false

and misleading prior to or shortly after its issuance and had the ability and opportunity to prevent

its issuance or cause it to be corrected. Because of their positions and access to material, non-

public information, the Individual Defendants knew or recklessly disregarded that the adverse facts

specified herein had not been disclosed to and were being concealed from the investing public and

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 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 21 of 29

that the positive representations that were being made were false and misleading. As a result, each

of the Individual Defendants is responsible for the accuracy of CrowdStrike’s corporate statements

and is, therefore, responsible and liable for the representations contained therein.

X. LOSS CAUSATION/ECONOMIC LOSS

53. During the Class Period, as detailed herein, CrowdStrike and the Individual

Defendants made false and misleading statements and omissions, and engaged in a scheme to

deceive the market. These false and misleading statements and omissions artificially inflated the

price of CrowdStrike stock and operated as a fraud or deceit on the Class. Later, when Defendants’

prior misrepresentations and fraudulent conduct were disclosed to the market, the price of

CrowdStrike stock fell significantly. As a result of their purchases of CrowdStrike stock during

the Class Period, Plaintiff and the Class suffered economic loss, i.e., damages, under the federal

securities laws.

XI. APPLICABILITY OF PRESUMPTION OF RELIANCE: FRAUD ON THE

MARKET

54. Plaintiff will rely upon the presumption of reliance established by the fraud-on-the-

market doctrine in that, among other things:

(a) Defendants made public misrepresentations or failed to disclose material

facts during the Class Period;

(b) the omissions and misrepresentations were material;

(c) the Company’s stock traded in an efficient market;

(d) the misrepresentations alleged would tend to induce a reasonable investor

to misjudge the value of the Company’s stock; and

20
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 22 of 29

(e) Plaintiff and other members of the Class purchased CrowdStrike stock

between the time Defendants misrepresented or failed to disclose material facts and the time the

true facts were disclosed, without knowledge of the misrepresented or omitted facts.

55. At all relevant times, the market for CrowdStrike stock was efficient for the

following reasons, among others:

(a) as a regulated issuer, CrowdStrike filed periodic public reports with the

SEC;

(b) CrowdStrike regularly communicated with public investors via established

market communication mechanisms, including through regular disseminations of press releases on

the major newswire services and through other wide-ranging public disclosures, such as

communications with the financial press, securities analysts, and other similar reporting services;

(c) CrowdStrike was followed by numerous securities analysts employed by

major brokerage firms who wrote reports that were distributed to the sales force and certain

customers of their respective brokerage firms and that were publicly available and entered the

public marketplace; and

(d) CrowdStrike stock was actively traded in an efficient market, including its

common stock that was traded on the NASDAQ, under the ticker symbol “CRWD.”

56. As a result of the foregoing, the market for CrowdStrike stock promptly digested

current information regarding CrowdStrike from publicly available sources and reflected such

information in CrowdStrike stock prices. Under these circumstances, all purchasers of

CrowdStrike stock during the Class Period suffered similar injury through their purchase of

CrowdStrike stock at artificially inflated prices and the presumption of reliance applies.

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 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 23 of 29

57. Further, to the extent that the Defendants concealed or improperly failed to disclose

material facts with regard to the Company, Plaintiff and the Class are entitled to a presumption of

reliance in accordance with Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 153-54

(1972).

XII. NO SAFE HARBOR

58. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

The statements alleged to be false and misleading herein all relate to then-existing facts and

conditions. In addition, to the extent certain of the statements alleged to be false may be

characterized as forward-looking, they were not identified as “forward-looking statements” when

made and there were no meaningful cautionary statements identifying important factors that could

cause actual results to differ materially from those in the purportedly forward-looking statements.

In the alternative, to the extent that the statutory safe harbor is determined to apply to any forward-

looking statements pleaded herein, Defendants are liable for those false forward-looking

statements because at the time each of those forward-looking statements were made, the speaker

had actual knowledge that the forward-looking statement was materially false or misleading,

and/or the forward-looking statement was authorized or approved by an executive officer of

CrowdStrike who knew that the statement was false when made.

XIII. CLAIMS AGAINST DEFENDANTS

Violations of Section 10(b) of the Exchange Act

and SEC Rule 10b-5 Promulgated Thereunder
Against All Defendants

59. Plaintiff incorporates by reference the allegations in the preceding paragraphs.

22
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 24 of 29

60. This Count is asserted against Defendants and is based upon Section 10(b) of the

Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.

61. During the Class Period, Defendants disseminated or approved the false statements

specified above, which they knew or recklessly disregarded were misleading in that they contained

misrepresentations and failed to disclose material facts necessary in order to make the statements

made, in light of the circumstances under which they were made, not misleading.

62. Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 in that they:

(a) Employed devices, schemes, and artifices to defraud;

(b) Made untrue statements of material facts or omitted to state material facts

necessary in order to make the statements made, in light of the circumstances under which they

were made, not misleading; or

(c) Engaged in acts, practices, and a course of business that operated as a

fraud or deceit upon Plaintiff and others similarly situated in connection with their purchases of

CrowdStrike stock during the Class Period.

63. Plaintiff and the Class have suffered damages in that, in reliance on the integrity of

the market, they paid artificially inflated prices for CrowdStrike stock. Plaintiff and the Class

would not have purchased CrowdStrike stock at the prices they paid, or at all, if they had been

aware that the market prices had been artificially and falsely inflated by Defendants’ misleading

statements.

64. As a direct and proximate result of these Defendants’ wrongful conduct, Plaintiff

and the other members of the Class suffered damages in connection with their purchases of

CrowdStrike stock during the Class Period.

23
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 25 of 29

65. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange Act

and Rule 10b-5, promulgated thereunder.

Violations of Section 20(a) of the Exchange Act

Against the Individual Defendants

66. Plaintiff repeats and realleges the allegations contained in ¶¶ 1-58 as if fully set

forth herein.

67. The Individual Defendants acted as controlling persons of CrowdStrike within the

meaning of Section 20(a) of the Exchange Act. By virtue of their positions and their power to

control public statements about CrowdStrike, the Individual Defendants had the power and ability

to control the actions of CrowdStrike and its employees. By reason of such conduct, Individual

Defendants are liable pursuant to Section 20(a) of the Exchange Act.

XIV. PRAYER FOR RELIEF

WHEREFORE, Plaintiff, individually and on behalf of the proposed Class, respectfully

prays for judgment against Defendants as follows:

A. Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of

Civil Procedure and Plaintiff’s counsel as Lead Counsel;

B. Awarding Plaintiff and the Class compensatory damages against all Defendants,

jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an

amount to be proven at trial, together with pre-judgment interest thereon;

C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including, but not limited to, attorneys’ fees and costs incurred by consulting and

testifying expert witnesses; and

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 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 26 of 29

D. Granting such other, further, and/or different relief as the Court deems just and

proper.

XV. JURY DEMAND

Plaintiff demands a trial by jury.

DATED: July 30, 2024 LABATON KELLER SUCHAROW LLP

/s/ Guillaume Buell

Guillaume Buell (TX Bar # 24080813)
Eric J. Belfi
Francis P. McConville
140 Broadway
New York, New York 10005
Telephone: (212) 907-0700
Facsimile: (212) 818-0477
gbuell@labaton.com
ebelfi@labaton.com
fmcconville@labaton.com

Counsel for Plaintiff and the Proposed Class

25
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 27 of 29

CERTIFICATION

I, Padraic P. Lydon, as Executive Director of Plymouth County Retirement Association

(“Pljmiouth Count5r”), hereby certify as follows:

1. I am fully autiiorized to enter into and execute this Certification on behalf of

Plymouth County. I have reviewed a complaint prepared against CrowdStrike Holdings, Inc.

(“CrowdStrike*’) alleging violations of the federal securities laws and authorize the filing of this

pleading;

2. Plymouth County did not pmchase Class A common stock of CrowdStrike at the

direction of counsel or in order to participate in any private action under the federal securities laws;

3. Plymouth County is willing to serve as a lead plaintiff and representative party in this

matter, including providing testimony at deposition and trial, if necessary. Plymouth County fully

understands the duties and responsibilities of the lead plaintiff under the Private Securities litigation

Reform Act, including the selection and retention of counsel and overseeing the prosecution of the

action for the Class;

4. Plymouth County’s transactions in CrowdStrike Class A common stock during the

Class Period are reflected in Exhibit A, attached hereto;

5. Plymouth County sought to serve as a lead plaintiff or representative party in the

following class actions filed under the federal securities laws during the last three years:

Plymouth County PeHrement Association v. AppMarvesty Inc., No. l:21-cv-09676 (S.D.N.Y.)

In re Astra Space Inc. flkla HoHcity Inc. Securities Litigation, No. 3:22-cv-08875 (N.D. Cal.)
Plymouth County PsHrement Association v. Upstart Hoangs, Inc. No. 3:22-cv-02973 (N.D. Cal.) (filing
plaintiff
Plymouth County PsHrement Association v. Outset Mescal, Inc., No. 3:22-cv-04016 (N.D. Cal.) (filing
plaintiff

6. Beyond its pro rata share of any recovery, Plymouth County will not accept payment

for serving as a lead plaintiff and representative party on behalf of the Class, except the

reimbursement of such reasonable costs and expenses ^eluding lost wages) as ordered or approved

by the Court.
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 28 of 29

I declare under penalty of perjury, under the laws of the United States, that the foregoing is

true and correct this day of July, 2024.

'i i/ 7'
Padraic P. Lydon 7
Executive Director
Plymouth County Retirement Association

2
 Case 1:24-cv-00857 Document 1 Filed 07/30/24 Page 29 of 29

EXHIBIT A

TRANSACTIONS IN CROWDSTRIKE HOLDINGS, INC.

Transaction Type Trade Date Shares Price Per Share Cost/Proceeds

Sales 12/27/2023 (700) $257.24 $180,064.99

Sales 2/1/2024 (450) $298.92 $134,513.46

Purchases 6/5/2024 15 $338.15 ($5,072.25)

JS 44 (Rev. 04/21) Case 1:24-cv-00857 Document
CIVIL COVER Filed 07/30/24 Page 1No.
1-1 SHEET of24-cv-857
2
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
I. (a) PLAINTIFFS DEFENDANTS
PLYMOUTH COUNTY RETIREMENT ASSOCIATION, CROWDSTRIKE HOLDINGS, INC., GEORGE KURTZ, and
Individually and on Behalf of All Others Similarly Situated BURT W. PODBERE
(b) County of Residence of First Listed Plaintiff Plymouth County County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)

Labaton Keller Sucharow LLP, Guillaume Buell, 140

Broadway, NY, NY 10005, Tel: 212-907-0700
II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
1 U.S. Government ✖ 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4
of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6

Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions.
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC
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of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud 710 Fair Labor Standards Act of 2016 (15 USC 1681 or 1692)
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Confinement
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Proceeding State Court Appellate Court Reopened Another District Litigation - Litigation -
(specify) Transfer Direct File
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
15 U.S.C. §§ 78j(b) and 78t(a)
VI. CAUSE OF ACTION Brief description of cause:
Violations of the federal securities laws
VII. REQUESTED IN ✖ CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P. JURY DEMAND: ✖ Yes No
VIII. RELATED CASE(S)
(See instructions):
IF ANY JUDGE DOCKET NUMBER
DATE SIGNATURE OF ATTORNEY OF RECORD
July 30, 2024 /s/ Guillaume Buell
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE

JS 44 Reverse (Rev. 04/21) Case 1:24-cv-00857 Document 1-1 Filed 07/30/24 Page 2 of 2
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44
Authority For Civil Cover Sheet

The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:

I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then
the official, giving both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".

II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X"
in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
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to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
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III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
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PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to
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VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
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Date and Attorney Signature. Date and sign the civil cover sheet.