Former FBI Chief Information Officer Gordon Bitko reacts to Solarwinds hackers by accessing Microsoft’s source code.
A SolarWinds shareholder filed a class action lawsuit in the United States District Court for the Western District of Texas on Monday against the company’s president, Kevin Thompson, and chief financial officer, J. Barton Kalsu, alleging that executives violated the federal securities laws under the Securities Exchange Act of 1934.
SOLARWINDS HACKERS VIEWED MICROSOFT SOURCE CODE
The lawsuit alleges that SolarWinds’ leadership “misrepresented and did not disclose” information about the company’s recent hack, causing a “dramatic drop in the market value of the company’s securities”, which resulted in “significant losses and damages” for investors who bought actions between February 24 and December 15, 2020.
The lawsuit claims that SolarWinds misrepresented or did not disclose to shareholders that the company’s Orion monitoring products had a vulnerability since mid-2020 that allowed hackers to compromise the product server and that the SolarWinds update server had an easy password ‘solarwinds123’ access that would leave customers, including the federal government, Microsoft, Cisco and Nvidia vulnerable to hacks.
In addition, the misleading statements caused the company and its shareholders to suffer “significant reputational damage” and SolarWinds’ market price “artificially inflated”.
| Ticker | Safety | Last | change | Change % |
|---|---|---|---|---|
| SWI | SOLARWINDS CORPORATION | 14.53 | -0.42 | -2.81% |
The shareholders claim that the executives had “real knowledge of material omissions and / or falsity of material statements” and intended “to deceive the Claimant and the other members of the Class, or alternatively acted recklessly by the truth when they failed to ascertain and disclose the true facts in the statements made by them or other SolarWinds personnel to members of the investing public. “
“If the Claimant and the other Class members were aware that the market price of SolarWinds ‘securities had been artificially and falsely inflated by the Defendants’ misleading statements and material adverse information that the Defendants did not disclose, they would not have purchased securities from the Defendants. SolarWinds on the artificially inflated prices they made, or at all, “adds the process. “As officers and / or directors of a public company, individual defendants had a duty to disseminate accurate and truthful information regarding SolarWinds’ business practices and to promptly correct any public statements issued by SolarWinds that have become materially false or misleading. “
The suit seeks unspecified damages for “reasonable costs and expenses incurred”, including legal and expert fees, as well as any additional remedies the court deems appropriate.
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In addition to shareholders, at least 18,000 SolarWinds customers were affected by the hack, including many Fortune 500 companies and several government agencies. US intelligence officials blamed Russia, but the Kremlin denied involvement.
A SolarWinds spokesman did not comment directly on the process, but told FOX Business that it is “solely focused on helping the industry and our customers understand and mitigate this attack”, noting that it has quickly released updates to customers it believes “will close the vulnerability.”
“We are collaborating closely with federal law enforcement and intelligence agencies to investigate the full scope of this unprecedented attack, including whether it was supported by resources from a foreign government,” added the spokesman. “We are also working with industry-leading third-party cybersecurity experts to help investigate, mitigate and remedy this attack.”
In addition, the company said it has taken a series of measures to further protect its network and products, including advanced endpoint detection and monitoring tools.
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The company’s stock has fallen more than 34% since news of the attack was released. In addition, companies like Truist Securities and Baird downgraded SolarWinds’ shares from a purchase to maintain them, with both anticipating stock price targets falling to around $ 15. The stock closed at $ 14.53 per share at the end of Monday’s trading session.
Paul Best of Fox Business contributed to this report.