January 4, 2021 - An investor in shares of SolarWinds Corporation (NYSE: SWI) filed a lawsuit in the U.S. District Court for the Western District of Texas over alleged violations of Federal Securities Laws by SolarWinds Corporation in connection with certain allegedly false and misleading statements made between February 24, 2020 and December 15, 2020.
Austin, TX based SolarWinds Corporation provides information technology (IT) infrastructure management software products in the United States and internationally. SolarWinds Corporation reported that its annual Total Revenue rose from $833.08 million in 2018 to $932.52 million in 2019 and that its EBIT increased from $20.29 million in 2018 to $135.57 million in 2019.
On December 13, 2020 it was reported that state-sponsored hackers are believed to have penetrated the IT systems of federal government agencies by manipulating software updates released by SolarWinds. SolarWinds Corporation disclosed on December 14, 2020, that the hackers targeted its Orion monitoring product, interfering with updates between March and June 2020. Shares of SolarWinds Corporation (NYSE: SWI) declined from $24.34 per share on December 9, 2020, to as low as $13.98 per share on December 18, 2020.
According to the complaint the plaintiff alleges on behalf of purchasers of SolarWinds Corporation (NYSE: SWI) common shares between February 24, 2020 and December 15, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between February 24, 2020 and December 15, 2020, the defendants made false and/or misleading statements and/or failed to disclose that since mid-2020, SolarWinds Orion monitoring products had a vulnerability that allowed hackers to compromise the server upon which the products ran, that SolarWinds’ update server had an easily accessible password of ‘solarwinds123’, that consequently, SolarWinds’ customers, including, among others, the Federal Government, Microsoft, Cisco, and Nvidia, would be vulnerable to hacks, that as a result, the Company would suffer significant reputational harm, and that 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. When the true details entered the market, the lawsuit claims that investors suffered damages.