Dismissed charges

Although the judge ordered that the securities fraud charge proceed to trial, he dismissed all of the other charges. Those charges included the SEC’s argument that security misrepresentations amount to accounting errors, and that statements made in news releases and blogs also fooled investors.

Engelmayer also dismissed public statements by Brown, including those in company-approved press releases, blog posts, and podcasts, “because each qualifies as non-actionable corporate puffery, too general to cause a reasonable investor to rely upon them.”

The judge said that when the SEC faulted the public disclosures, it “means to fault SolarWinds for not spelling out these risks in greater detail.” But, the judge wrote, “the case law does not require more” and specifically does not require “that the company set out in substantially more specific terms scenarios under which its cybersecurity measures could prove inadequate. As decisions in this District have recognized, the anti-fraud laws do not require cautions to be articulated with maximum specificity.”