N.Y. State Common pension fund tapped as lead plaintiff in CrowdStrike lawsuit

A federal judge in Austin, Texas has designated the New York State Common Retirement Fund, Albany, as lead plaintiff in a series of financial fraud lawsuits filed against cybersecurity company CrowdStrike Holdings, triggered by widespread outages in July linked to the company's technology.

U.S. District Court Judge Robert Pittman on Oct. 30 granted the request by Thomas P. DiNapoli, the state comptroller and sole trustee of the $267.7 billion New York Common Retirement Fund. The pension fund met the terms of a federal law that says a lead plaintiff in a private securities lawsuit must have the “largest financial interest," the judge wrote.

Among other institutional investors suing CrowdStrike are the Plymouth County (Mass.) Retirement Association, which filed the first fraud lawsuit on July 30.

The New York pension fund owns $72 million in CrowdStrike stock, according to a spokesman for DiNapoli. The pension fund lost between $16.4 million and $16.7 million on its investment between Nov. 29, 2023 and July 19, 2024, according to DiNapoli’s petition.

The comptroller filed his request Sept. 30 based on the Plymouth County Retirement Assn. lawsuit, which sought class-action status.

“Defendants misled investors regarding CrowdStrike’s internal controls and procedures for updating its Falcon software platform,” DiNapoli's petition said.

Investors, including the New York pension fund, “incurred significant losses when CrowdStrike’s failure to follow appropriate, industry standard testing protocols and procedures caused what has been described as the largest IT outage in history," the petition said.

DiNapoli’s document said defendants – the company plus CEO George Kurtz and CFO Burt W. Podbere – “falsely touted the effectiveness of CrowdStrike’s procedures and protocols for testing updates to its Falcon platform," a reference to CrowdStrike's technology.

The Plymouth County Retirement Assn. lawsuit said 8.5 million Windows users were affected including government agencies, corporations, airlines that had to cancel flights and emergency 911 hotlines.

The judge ordered that all lawsuits claiming securities fraud by CrowdStrike be consolidated under the name In Re CrowdStrike Holdings Inc. Securities Litigation.