Judge dismisses majority of SEC case against SolarWinds over cyberattack
Search our blog for articles and insights right here, just type your interest and dive into a world of knowledge.
Popular articles
Significant Ruling in SolarWinds SEC Lawsuit
A U.S. judge has substantially narrowed the Securities and Exchange Commission's (SEC) case against software company SolarWinds, which alleged the company misled investors about its cybersecurity vulnerabilities before and after a significant cyberattack on the U.S. government. The decision, made by U.S. District Judge Paul Engelmayer in Manhattan, allows the SEC to pursue only one of its claims.
Narrowed Fraud Claim
The SEC lawsuit claimed SolarWinds engaged in securities fraud by concealing its cybersecurity weaknesses from investors. Judge Engelmayer ruled that the SEC could continue with a specific fraud claim related to a statement on the SolarWinds website about its cybersecurity practices made before the notorious "Sunburst" attack.
Pre-Sunburst Disclosures
Most of the SEC's charges based on statements SolarWinds made before the Sunburst attack were dismissed. These dismissals suggest that, according to Judge Engelmayer, the claims did not sufficiently demonstrate that SolarWinds misled investors in its pre-attack disclosures.
Post-Sunburst Disclosures
The judge also dismissed all claims concerning disclosures made after the Sunburst attack. He stated that these claims were rooted in "hindsight and speculation," indicating they lacked the necessary substantiation to proceed in court.
In conclusion, while the ruling significantly limits the scope of the SEC’s case, it does permit further examination of specific aspects of SolarWinds' pre-attack cybersecurity statements. The focus of the case now will be whether the company's representations on its website constituted securities fraud.
