A federal judge on Thursday dismissed part of a landmark government lawsuit against SolarWinds and its top cybersecurity executive over how the software company dealt with a breach disclosed in 2020 that affected customers, including U.S. government agencies.
The Securities and Exchange Commission last year sued Austin, Texas-based SolarWinds and its chief information security officer, Tim Brown, over how it presented the risk of a cyberattack before the breach and what it told investors after the hack occurred. The case marked the first time securities regulators went to court with civil-fraud claims—the most serious charge at the agency’s disposal—against a public company that suffered a cyberattack.
Some business groups and former prosecutors say the SEC’s enforcement actions against hacked companies blame the victim of the attacks, which foreign, state-backed actors sometimes carry out. The SEC says that shareholders deserve to know how public companies respond to the risk of attacks, which often drag down the firm’s stock price.
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