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ARTICLE · 15 AUGUST 2024

Down But Not Out: Federal Court Curbs SEC Cybersecurity Enforcement Authority

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In a stinging rebuke of its attempted cybersecurity-related enforcement against a public company, a federal judge recently dismissed most of the charges that the U.S. Securities and Exchange Commission (SEC)...

United StatesTechnology
Joseph W. Swanson
Joseph W. Swanson
James G. Lundy
James G. Lundy
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In a stinging rebuke of its attempted cybersecurity-related enforcement against a public company, a federal judge recently dismissed most of the charges that the U.S. Securities and Exchange Commission (SEC) had filed against SolarWinds Corporation and the company's Chief Information Security Officer (CISO). The ruling is a remarkable setback for the SEC, but public companies and other regulated organizations should anticipate continued scrutiny from the SEC when it comes to cybersecurity.

The SolarWinds Case

In 2023, the SEC charged SolarWinds and its CISO with fraud and internal control failures related to allegedly known cybersecurity vulnerabilities. According to the SEC, the defendants overstated the company's cybersecurity practices and understated the company's cybersecurity risks. The defendants allegedly knew of specific deficiencies in the company's cybersecurity program, and those deficiencies were exposed in December 2020 when the company announced

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