CrowdStrike disclosed that it is cooperating with multiple U.S. federal investigations into the July 2024 software update failure that triggered a global IT outage, according to SiliconANGLE.
According to an SEC filing, the Justice Department and SEC are seeking information not only on the incident but also on the company's accounting practices, particularly its revenue recognition and reporting of annual recurring revenue. The disruption, traced to a defective Falcon Sensor update on Windows systems, caused widespread system crashes across key sectors, including healthcare, aviation, and banking. Microsoft estimated the issue impacted 8.5 million machines and clarified it was not a cyberattack but an internal software fault by CrowdStrike. Inquiries and potential legal actions from government bodies and affected third parties are underway. CrowdStrike acknowledged shortcomings in its update validation process and promised reforms. The disclosure coincided with weaker-than-expected earnings guidance, signaling the incidents potential long-term effects on the companys reputation and growth trajectory.
According to an SEC filing, the Justice Department and SEC are seeking information not only on the incident but also on the company's accounting practices, particularly its revenue recognition and reporting of annual recurring revenue. The disruption, traced to a defective Falcon Sensor update on Windows systems, caused widespread system crashes across key sectors, including healthcare, aviation, and banking. Microsoft estimated the issue impacted 8.5 million machines and clarified it was not a cyberattack but an internal software fault by CrowdStrike. Inquiries and potential legal actions from government bodies and affected third parties are underway. CrowdStrike acknowledged shortcomings in its update validation process and promised reforms. The disclosure coincided with weaker-than-expected earnings guidance, signaling the incidents potential long-term effects on the companys reputation and growth trajectory.
