Former FBI Chief Information Officer Gordon Bitko responds to Solarwinds hackers accessing the source code in Microsoft.
A SolarWinds shareholder filed a lawsuit in U.S. District Court in the Texas District of Texas on Monday against company president Kevin Thompson and chief financial officer J. Barton Kalsu, alleging the executives violated federal security laws the Securities. Bills of Exchange Act of 1934.
SOLARWINDS HACKERS SEE MICROSOFT SOURCE CODE
The lawsuit alleges that SolarWinds leaders misrepresented information about the company’s recent hack and did not disclose it, causing a “drastic decline in the market value of the company’s securities”, which led to ” significant losses and damages “for investors who bought shares between February 24 and 15 December 2020.
The case alleges that SolarWinds misrepresented or disclosed to shareholders that the company’s Orion monitoring products have had a vulnerability since mid-2020 that could allow hackers to compromise the product’s server and that SolarWinds’ update server has an easily accessible password of had ‘solarwinds123’. would make 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 a significant reputational injury and have an artificially upward price of SolarWinds’ market price.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| SWI | SOLARWINDS CORPORATION | 14.53 | -0.42 | -2.81% |
Shareholders allege that managers ‘had actual knowledge of the material omission and / or falsity of the material statements’ and were intended to ‘mislead the plaintiff and the other members of the class, or, alternatively, act with reckless disregard for the truth’ when they failed to establish and disclose the true facts in the statements of them or other SolarWinds staff to members of the investment public. ‘
“If the plaintiff and the other members of the class were aware that the market price of SolarWinds securities was artificially and falsely inflated by the misleading statements of the accused and by the material unfavorable information which the defendants did not disclose, they would did not buy SolarWinds bonds at the artificially high prices they did, or not at all, “the lawsuit adds. “As officers and / or directors of a publicly owned company, the individual defendants have a duty to disseminate accurate and truthful information regarding SolarWinds’ business practices, and to all public statements issued by SolarWinds and which has become materially false or misleading.
The lawsuit claims unspecified damages for ‘reasonable costs and expenses incurred’, including advisory and expert fees, as well as any additional legal aid that 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 businesses and numerous government agencies. U.S. intelligence officials blamed Russia, but the Kremlin denied the allegations.
A SolarWinds spokesman did not directly comment on the lawsuit, but told FOX Business that it “is solely aimed at helping the industry and that our customers understand and mitigate this attack,” and noted that it quickly released updates to customers that they believe will close the vulnerability. . “
“We are working closely with federal law enforcement and intelligence agencies to investigate the full extent of this unprecedented attack, including whether it is backed by the resources of a foreign government,” the spokesman added. “We are also working with leading third-party cybersecurity experts to investigate, mitigate and repair this attack.”
In addition, the company said it has taken a number of steps to further secure its network and products, including through advanced endpoint detection and monitoring tools.
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The company’s share has fallen by more than 34% since the news of the attack became known. In addition, people like Truist Securities and Baird have both downgraded SolarWinds shares from a buy to hold, and both also expect the share price target to drop to around $ 15. The stock closed at $ 14.53 a share at the end of Monday’s trading session.
Fox Best ‘Paul Best contributed to this report.