Shares of cybersecurity firm CrowdStrike Holdings, Inc. (CRWD) plummeted over 5% in intraday trading on Friday, as reports surfaced that the company is facing investigations by the US Department of Justice and Securities and Exchange Commission regarding a $32 million deal with Carahsoft.
According to reports from Bloomberg, investigators are probing a deal in which Carahsoft paid CrowdStrike $32 million to provide cybersecurity tools to the Internal Revenue Service (IRS). However, the IRS never actually purchased the products from CrowdStrike, raising questions about the nature and purpose of the transaction.
Investigators have been conducting interviews and gathering documents related to the deal, which was completed by CrowdStrike in 2023 near the end of a fiscal quarter. The scrutiny from regulatory agencies has raised concerns among investors, leading to the sharp decline in CrowdStrike's stock price during the trading session.
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