[BreachExchange] Class Action Lawsuit Filed Against SolarWinds Over Hack

[Destry Winant]

https://www.securityweek.com/class-action-lawsuit-filed-against-solarwinds-over-hack

A class action lawsuit was filed on behalf of SolarWinds investors
this week over the cybersecurity breach suffered by the Texas-based IT
management solutions provider.

A complaint was filed in the Western District of Texas by Timothy
Bremer on behalf of shareholders, specifically those who acquired
SolarWinds stock between February 24, 2020, and December 15, 2020.

The complaint names SolarWinds, as well as Kevin Thompson, who served
as the company’s CEO until just days before the incident was
disclosed, and Barton Kalsu, executive VP and CFO of SolarWinds.

The lawsuit points out that the value of SolarWinds shares decreased
significantly following the disclosure of the cyberattack — from
nearly $24 per share to roughly $18 a few days after the breach came
to light.

The complaint references the financial reports filed by SolarWinds
while threat actors had access to its systems and alleges that the
company’s executives “made false and/or misleading statements and/or
failed to disclose that: (1) since mid-2020, SolarWinds Orion
monitoring products had a vulnerability that allowed hackers to
compromise the server upon which the products ran; (2) SolarWinds’
update server had an easily accessible password of ‘solarwinds123’;
(3) consequently, SolarWinds’ customers, including, among others, the
Federal Government, Microsoft, Cisco, and Nvidia, would be vulnerable
to hacks; (4) as a result, the Company would suffer significant
reputational harm; and (5) as a result, Defendants’ statements about
SolarWinds’s business, operations and prospects were materially false
and misleading and/or lacked a reasonable basis at all relevant
times.”

The plaintiff also referenced some of the statements made by
third-parties claiming that they had informed SolarWinds regarding
various vulnerabilities and security risks, but were ignored by the
company.

The attackers are believed to have gained access to the firm’s systems
at least one year before the intrusion was discovered.

SolarWinds investors can join the class action until March 5.

Continuous Updates: Everything You Need to Know About the SolarWinds Attack

An investigation has been launched into whether SolarWinds executives
were aware of the breach when they decided to sell hundreds of
millions of dollars worth of stock just before the hack came to light.
The company claims they were not aware of the incident.

Several U.S. agencies on Tuesday officially said Russia was likely
responsible for the attack, accusations that Moscow has denied.

SolarWinds said up to 18,000 customers may have received trojanized
product updates delivered by the attackers, but the actual number of
organizations that presented an interest to the hackers was likely
only a few hundred. The New York Times reported recently that over 250
government agencies and businesses were breached through the supply
chain attack.

Investigations into the SolarWinds attack are now trying to determine
whether the company was also targeted by a second, unrelated threat
actor, that apparently may have leveraged a zero-day vulnerability
affecting SolarWinds products and a piece of malware named Supernova.