A federal court in Texas has largely refused to dismiss board members and officials’ securities disputes filed against SolarWinds Corp. in conjunction with a Invasion of cybersecurity in December 2020.
The main plaintiff in the lawsuit is the New York City District Council of the Carpenters Pension Fund, which filed a lawsuit against SolarWinds, its officials and two investment firms, following last week’s ruling by the U.S. District Court in Austin in Subject: SolarWinds Corp. Securities Litigation. The verdict was first reported by The D&O Diary.
The intrusion was described by the US General Accountability Office as “one of the most widespread and sophisticated hacking campaigns ever carried out against the federal government and the private sector.”;
The complaint accused SolarWinds of incorrectly telling investors that they had a robust cybersecurity system. It also said that a week before the intrusion was revealed and SolarWind’s share price fell, then-CEO Kevin B. Thompson sold more than $ 20 million in the company’s shares.
The court refused to dismiss an allegation that Tim Brown, who was vice president of security architecture, had “acted with, at least, serious ruthlessness in praising the security measures implemented at SolarWinds,” the ruling said, by also refusing to dismiss the allegations. that Mr Brown and SolarWinds had made material misstatements or omissions.
The court also ruled that the plaintiffs had sufficiently argued that “it is more likely than not” that corrective revelations after the incident “caused the virtually simultaneous falls” in the prices of Solar Wind’s securities.
In addition, the court refused to dismiss certain charges against Mr. Thompson specifically. However, it considered that the plaintiffs “failed to effectively invoke scientists” against Mr. Thompson, referring to knowledge or intent to make a mistake, and granted his request to dismiss this accusation, albeit with permission to change.
The lawyers in the case had no comments or did not respond to a request for comment.