Texas-based IT management solutions provider SolarWinds has agreed to pay $26 million to settle a shareholder lawsuit over the data breach disclosed by the company in 2020.
The cyberattack involved Russia-linked threat actors breaching SolarWinds systems in 2019, or possibly even earlier. The hackers compromised the automated build environment for the company’s Orion monitoring software, and in the spring of 2020 they pushed out malicious Orion updates to SolarWinds customers.
The malicious updates were sent out to thousands of SolarWinds customers, but only approximately 100 organizations were of interest to the attackers and received additional malware. This included private and government organizations.
The breach came to light in December 2020 and, in January 2021, SolarWinds investors filed a class action lawsuit against the company, unhappy with the impact the breach and its disclosure had on the value of their shares.
SolarWinds now says it has reached an agreement with shareholders and it’s prepared to pay $26 million, which includes legal fees. However, the settlement, which has been authorized and approved by insurers, still needs to be approved by a court.
“The proposed settlement resolves all claims asserted against the Company and the other named defendants in connection with the class action litigation and would contain provisions that the settlement does not constitute an admission, concession, or finding of any fault, liability, or wrongdoing of any kind by the Company or any defendant,” SolarWinds said in an SEC filing.
The same filing also reveals that the SEC might be taking action against the company over its “cybersecurity disclosures and public statements, as well as its internal controls and disclosure controls and procedures”.
SolarWinds’ latest financial report shows that the cybersecurity incident has cost it tens of millions of dollars to date, and the company expects to continue to incur significant expenses associated with the breach. Some breach-related expenses are covered by insurance.
The company expects a total revenue of roughly $700 million for 2022.