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ARTICLE · 26 MARCH 2024

Officer And Director Liability For Cybersecurity Breaches: Canadian Implications Of The SolarWinds Case

Miller Thomson
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With the continued prevalence of cybersecurity threats and the many times associated consequences of business interruption, reputational damage, personal data breaches...

GlobalTechnology
David Schnurr
David Schnurr
David Krebs
David Krebs
Jayme Millar
Jayme Millar
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FACTS

With the continued prevalence of cybersecurity threats and the many times associated consequences of business interruption, reputational damage, personal data breaches, disclosure of confidential and proprietary information, as well as loss of revenue, it comes as no surprise that cybersecurity must be top of mind for Canadian business leaders and board members.

A recent case from the U.S. is instructive on both sides of the border as it relates to director and officer liability for failure to appropriately address cybersecurity risks.

In January 2024, SolarWinds Corporation ("SolarWinds"), a U.S. company, filed a motion to dismiss the charges brought by the Securities and Exchange Commission ("SEC") in October 2023 against SolarWinds and its Chief Information Security Officer ("CISO"), Timothy Brown, for fraud and internal control failures relating to allegedly known cybersecurity risks and vulnerabilities. SolarWinds, which provides IT

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