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We need more popcorn, as the SEC vs. SolarWinds case continues. The SEC responded on the 24th May to Judge Hon. Paul A. Engelmayer, in response to the latest SolarWinds challenge. Disputing that it neither distorted facts nor intentionally omitted material information. Rather allegations in the amended complaint (ECF 85) are well-grounded in facts uncovered during the SEC’s investigation.
The SEC letter challenges SolarWinds interpretation of events, stating the companies own documents considered the October 2020 Palo Alto incident an attack. At the time SolarWinds and the CISO were informed by Palo Alto of malicious software activity by SolarWinds Orion Software.
The letter makes clear there are factual disputes between the SEC and SolarWinds. Both parties disagree about certain facts, the weight to be accorded to them; the meaning of certain documents and inferences drawn and as such do not form a proper basis for a motion to dismiss.
The SEC vs. SolarWinds case predates the SEC Final cyber risk rule. However the case remains focused on material risk management and reporting, and what the board and CISO knew at the time of the incident and what it reported. The case demonstrates the legal and regulatory compliance risks covered entities, boards and CISOs face. Legal and compliance risks will not go away, as U.S and EU regulators ramp up cyber regulation.
@Thaddeus Dziekanowski Brian D. McCarthy Rachel V. Rose, JD, MBA Ryan Buckner Johnathan Rudy
Veritas GRC U.S. Securities and Exchange Commission SolarWinds Palo Alto Networks
#cybersecurity #cyberriskmanagement #cyberregulation
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