SolarWinds urges US judge to toss out crap infosec sueball: We got pwned by actual Russia, give us a break

Company says it didn't skimp on security before everything went wrong

Updated SolarWinds is urging a US federal judge to throw out a lawsuit brought against it by aggrieved shareholders who say they were misled about its security posture in advance of the infamous Russian attack on the business.

Insisting that it was "the victim of the most sophisticated cyberattack in history" in a court filing, SolarWinds described a lawsuit from some of its smaller shareholders as an attempt to "convert this sophisticated cyber-crime" into an unrelated securities fraud court case.

"The Court should dismiss the Complaint because it fails to satisfy the heightened standards for pleading a Section 10(b) claim imposed by the Private Securities Litigation Reform Act," it said [PDF].

Financial newswire Reuters reported that the suit was originally filed over allegations that former SolarWinds chief exec Kevin Thompson cut cybersecurity efforts in the hope of driving greater dividends into the pockets of major investors, Silver Lake and Thoma Bravo, who each reportedly held around 40 per cent of SolarWinds' stocks at the time.

In the wake of the attack, SolarWinds' share price crashed from $24.83 to $14.95. It has rallied over the past few months back to $22.64 at the time of writing.

SolarWinds' motion to dismiss the case also alleged that the infamous "solarwinds123" password found on GitHub wasn't linked to the Russian attack, stating that the investors' legal team had not closely linked it to production systems used by the company. Infosec bod Vinoth Kumar told us last year that he was able to use that to upload a file to their servers as a proof-of-concept.

SolarWinds was attacked and breached by Russian spies who used their illicit access to compromise SolarWinds' build servers. Once that was done, they gained onwards access, through compromised (but signed) updates pushed through legitimate channels, to 18,000 of SolarWinds' customers. These included governmental organisations across the West, particularly including the US. British government sources played down the impact of the compromise on the UK public sector.

The motion to dismiss was filed with the US District Court for Western Texas.

Chief exec Sudhakar Ramakrishna told investors earlier this week: "It is an unfortunate fact that no company, regardless of its size, competency and resources seems immune to cyber-attacks as evidenced by the recent high-profile breaches."

The company posted Q2 revenues of $262m, which it said represented 6 per cent year-on-year growth; "well above the high end of the range of our outlook," as Ramakrishna put it. 86 per cent of its customers renewed their contracts during the period, he told an investors' earnings call.

The company swung to a loss of $11.624m as total operating expenses went up by more than $45m to $190m.

Updated on 5 August 2021 at 09.34 BST to add:

Following publication of this aricle, a SolarWinds spokesperson sent us a statement to say that, as noted by CISA, a "smaller number" of the 18,000 customers that downloaded the affected verson of the SolarWinds Orion software were compromised by follow-on activity on their systems.

"SolarWinds also recently shared an update that 18,000 is not the number of entities that were hacked. The company now estimates "the actual number of customers who were hacked through SUNBURST to be fewer than 100." ®

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