The gist of this rule is that stockholders who allege wrongdoings that have harmed a corporation must first ask the board to look into the matter before bringing a lawsuit and, if they do not, they must satisfy rigorous pleading standards. According to the plaintiffs, the board violated these duties by, among other things, allegedly ignoring warnings about cybersecurity deficiencies.Īfter carefully considering the plaintiffs’ allegations, the court concluded that dismissal was appropriate on Chancery Court Rule 23.1 grounds. The plaintiff stockholders in Bingle argued that the defendant directors breached their fiduciary duty of loyalty by purportedly failing to adequately prevent the 2020 breach. There, stockholders brought claims against the board of directors of SolarWinds for its alleged failure to oversee the company’s cybersecurity risk. As a consequence, SolarWinds found itself the target of litigation, including a derivative suit before the Delaware Court of Chancery in Construction Industry Laborers Pension Fund v.
#Solarwinds data breach software
Russian hackers are believed to have slipped malicious code into a SolarWinds software product called Orion, which was then used to infect, and in certain cases, compromise, SolarWinds customers. In 2020, SolarWinds Corp., a company that provided information technology software to private and government entities, was the victim of a cybersecurity breach.
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