SolarWinds SEC civil fraud case mostly dismissed, core allegations remain

TLDR:

• A U.S. District Court judge dismissed most of the charges in a civil fraud case filed against SolarWinds by the Securities and Exchange Commission.
• The SEC alleged that SolarWinds misled investors about cybersecurity practices leading up to the Sunburst supply chain hack.

In a recent court ruling, most of the charges brought by the Securities and Exchange Commission (SEC) against SolarWinds were dismissed. The SEC had filed a civil fraud case against SolarWinds, alleging that the company misled investors about its cybersecurity practices leading up to the Sunburst supply chain hack in 2020. The hack had a significant impact on the company’s customers, including major U.S. companies and government agencies. Judge Paul Engelmayer of the U.S. District Court Southern District of New York sustained the SEC’s claims of securities fraud based on SolarWinds’ security statement but dismissed other claims related to post-Sunburst disclosures and internal accounting and disclosure controls. The court is set to investigate allegations related to a 2017 security statement made by SolarWinds. SolarWinds expressed optimism about presenting its evidence in the next stage of the case. The case highlights the importance of transparency in cybersecurity practices and the legal implications for companies that mislead investors.