{"id":28046,"date":"2023-10-31T11:57:22","date_gmt":"2023-10-31T11:57:22","guid":{"rendered":"https:\/\/staging.sightlinemg.com\/federaltimes\/uncategorized\/2023\/10\/31\/sec-sues-solarwinds-for-alleged-cyber-neglect-ahead-of-russian-hack\/"},"modified":"2026-08-08T05:06:47","modified_gmt":"2026-08-08T05:06:47","slug":"sec-sues-solarwinds-for-alleged-cyber-neglect-ahead-of-russian-hack","status":"publish","type":"post","link":"https:\/\/staging.sightlinemg.com\/federaltimes\/federal-oversight\/doj-fbi\/2023\/10\/31\/sec-sues-solarwinds-for-alleged-cyber-neglect-ahead-of-russian-hack\/","title":{"rendered":"SEC sues SolarWinds for alleged cyber neglect ahead of Russian hack"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">U.S. regulators sued SolarWinds, a Texas-based technology company whose software was breached in a massive 2020 <a href=\"https:\/\/apnews.com\/article\/solarwinds-fireeye-hack-explained-07e55dfd7fb9e6de96b55a7788eaa93e\">Russian cyberespionage campaign<\/a>, for fraud for failing to disclose security deficiencies ahead of the stunning hack.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The company\u2019s top security executive was also named in the complaint filed <a href=\"http:\/\/oct.by\/\" target=\"_blank\">Oct. 30 by<\/a> the Securities and Exchange Commission seeking unspecified civil penalties, reimbursement of \u201cill-gotten gains\u201d and the executive\u2019s removal.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/staging.sightlinemg.com\/federaltimes\/it-networks\/2023\/06\/15\/federal-agencies-hit-by-wide-ranging-cyberattack\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"175\" src=\"https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/GettyImages-1408786421.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Federal agencies hit by \u2018wide-ranging\u2019 cyberattack<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">It&#039;s yet unclear which agencies were affected or how many.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">Detected in December 2020, the SolarWinds hack <a href=\"https:\/\/apnews.com\/article\/solarwinds-hack-email-top-dhs-officials-8bcd4a4eb3be1f8f98244766bae70395\">penetrated U.S. government agencies<\/a> including the Justice and Homeland Security departments, and more than 100 private companies and think tanks. It was a rude wake-up call that raised awareness in Washington about the urgency of stepping up efforts to better guard against intrusions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the 68-page complaint filed in New York federal court, the SEC says SolarWinds and its then vice president of security, Tim Brown, defrauded investors and customers \u201cthrough misstatements, omissions and schemes\u201d that concealed both the company\u2019s \u201cpoor cybersecurity practices and its heightened \u2014 and increasing \u2014 cybersecurity risks.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a statement, SolarWinds called the SEC charges unfounded and said it is \u201cdeeply concerned this action will put our national security at risk.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Brown performed his responsibilities \u201cwith diligence, integrity, and distinction,\u201d his lawyer, Alec Koch, said in a statement. Koch added that \u201cwe look forward to defending his reputation and correcting the inaccuracies in the SEC\u2019s complaint.\u201d Brown\u2019s current title at SolarWinds is chief information security officer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">\u2018Repeated red flags\u2019<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The SEC\u2019s enforcement division director, Gurbir S. Grewal, <a href=\"https:\/\/www.sec.gov\/news\/press-release\/2023-227\">said in a statement<\/a> that SolarWinds and Brown ignored \u201crepeated red flags\u201d for years, painting \u201ca false picture of the company\u2019s cyber controls environment, thereby depriving investors of accurate material information.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The very month that SolarWinds registered for an initial public offering, October 2018, Brown wrote in an internal presentation that the company\u2019s \u201ccurrent state of security leaves us in a very vulnerable state,\u201d the complaint says.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Among the SEC\u2019s damning allegations: An internal SolarWinds presentation shared that year said the company\u2019s network was \u201cnot very secure,\u201d meaning it was vulnerable to hacking that could lead to \u201cmajor reputation and financial loss.\u201d Throughout 2019 and 2020, the SEC alleged, multiple communications among SolarWinds employees, including Brown, \u201cquestioned the company\u2019s ability to protect its critical assets from cyberattacks.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SolarWinds, which is based in Austin, Texas, provides network-monitoring and other technical services to hundreds of thousands of organizations around the world, including most Fortune 500 companies and government agencies in North America, Europe, Asia and the Middle East.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"8410\" height=\"5140\" src=\"\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg\" alt=\"\" class=\"wp-image-74498\" srcset=\"https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg 8410w, https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg?resize=300,183 300w, https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg?resize=768,469 768w, https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg?resize=1024,626 1024w, https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg?resize=1536,939 1536w, https:\/\/staging.sightlinemg.com\/wp-content\/uploads\/2026\/08\/doj-building.jpg.jpg?resize=2048,1252 2048w\" sizes=\"auto, (max-width: 8410px) 100vw, 8410px\" \/><figcaption class=\"wp-element-caption\">The Department of Justice, Friday, June 9, 2023, in Washington. (Alex Brandon \/ AP)<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The nearly two-year espionage campaign involved the infection of thousands of customers by seeding malware in the update channel of the company\u2019s network management software. Capitalizing on the supply-chain hack, the Russian cyber operators then stealthily penetrated select targets including <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/press-briefings\/2021\/02\/17\/press-briefing-by-[%E2%80%A6]er-and-emerging-technology-anne-neuberger-february-17-2021\/\">at least nine<\/a> U.S. government agencies and prominent software and telecommunications providers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In its statement, SolarWinds called the SEC action an \u201cexample of the agency\u2019s overreach (that) should alarm all public companies and committed cybersecurity professionals across the country.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It did not explain how the SEC\u2019s action could put national security at risk, though some in the cybersecurity community have argued that holding corporate information security officers personally responsible for identified vulnerabilities could make them less diligent about uncovering and\/or disclosing them \u2014 and discourage qualified people from aspiring to such positions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the Biden administration, the SEC has been aggressive about holding publicly traded companies to account for cybersecurity lapses and failures to disclose vulnerabilities. In July, it <a href=\"https:\/\/apnews.com\/article\/sec-cybersecurity-breach-disclosure-risk-hacking-bb6252463637793bfdc8ace5bfcbe7df\">adopted rules<\/a> requiring them to disclose within four days all cybersecurity breaches that could affect their bottom lines. Delays would be permitted if immediate disclosure poses serious national-security or public-safety risks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Victims of the SolarWinds hack whose Microsoft email accounts were violated included the New York federal prosecutors\u2019 office, <a href=\"https:\/\/apnews.com\/article\/solarwinds-hack-email-top-dhs-officials-8bcd4a4eb3be1f8f98244766bae70395\">then-acting<\/a> Homeland Security Secretary Chad Wolf and members of the department\u2019s cybersecurity staff, whose jobs included hunting threats from foreign countries.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 2020 hack penetrated U.S. government agencies including the Justice and Homeland Security departments, and more than 100 companies and think tanks.<\/p>\n","protected":false},"author":7,"featured_media":39627,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":39,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":{"9":{"categories":["cyber","industry","home"],"primary_category":"cyber"}}},"categories":[60,39,12,31,14,9],"tags":[],"coauthors":[3222],"class_list":["post-28046","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contracting","category-doj-fbi","category-govcon","category-home","category-it-networks","category-federal-oversight"],"acf":{"subheadline":"","legacy_arc_id":"SV3ZRZFZFRDC7GFWGJRRASZTWY","arc_canonical_url":"\/federal-oversight\/doj-fbi\/2023\/10\/31\/sec-sues-solarwinds-for-alleged-cyber-neglect-ahead-of-russian-hack\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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