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.
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.