Solar Winds Corp.

SWI

On December 14, 2020, SolarWinds Corp. (NYSE: SWI) announced that it had become “aware of a cyberattack that inserted a vulnerability within its Orion monitoring products which, if present and activated, could potentially allow an attacker to compromise the server on which the Orion products run.” On this news, SolarWinds’ shares plunged $3.93 per share, or around 17%. Significantly, in the days leading up to this announcement and stock drop, SolarWinds insiders sold over $285 million worth of Company stock. Jacob S. Frenkel, a former senior counsel in the SEC’s Division of Enforcement, said “[o]f course the SEC is going to take a look at that . . . . Large trades in advance of a major announcement, then an announcement. That’s a formula for an insider trading investigation.”

On December 8, 2020,cybersecurity company FireEye, Inc. announced that it had been attacked by a highly sophisticated cyber threat actor and was investigating the breach with the FBI. On December 13, 2020, FireEye announced that the “compromise is delivered through updates to a widely-used IT infrastructure management software – the Orion network monitoring product from SolarWinds.” Block & Leviton’s investigation is focused on who at SolarWinds knew about the security vulnerabilities and when.

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