Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 1 of 17
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`
`TIMOTHY BREMER, Individually and on
`behalf of all others similarly situated,
`
`
`Plaintiff,
`
`v.
`
`
`
`SOLARWINDS CORPORATION, KEVIN B.
`THOMPSON, and J. BARTON KALSU,
`
`
`Defendants.
`
`
`
`Case No: 1:21-cv-2
`
`CLASS ACTION COMPLAINT FOR
`VIOLATION OF THE FEDERAL
`SECURITIES LAWS
`
`JURY TRIAL DEMANDED
`
`Plaintiff Timothy Bremer (“Plaintiff”), by Plaintiff’s undersigned attorneys, individually
`
`
`
`
`
`and on behalf of all other persons similarly situated, alleges the following based upon personal
`
`knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as to all other
`
`matters, based upon, inter alia, the investigation conducted by and through his attorneys, which
`
`included, among other things, a review of Defendants’ public documents, conference calls and
`
`announcements made by Defendants, United States Securities and Exchange Commission
`
`(“SEC”) filings, wire and press releases published by and regarding SolarWinds Corporation
`
`(“SolarWinds” or the “Company”), and information readily obtainable on the Internet. Plaintiff
`
`believes that substantial evidentiary support will exist for the allegations set forth herein after a
`
`reasonable opportunity for discovery.
`
`NATURE OF THE ACTION
`
`1.
`
`This is a class action on behalf of persons or entities who purchased or otherwise
`
`acquired publicly traded SolarWinds securities from February 24, 2020 through December 15,
`
`2020, inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by
`
`CLASS ACTION COMPLAINT - 1
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 2 of 17
`
`Defendants’ violations of the federal securities laws under the Securities Exchange Act of 1934
`
`(the “Exchange Act”).
`
`JURISDICTION AND VENUE
`
`2.
`
`The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of
`
`the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by
`
`the SEC (17 C.F.R. § 240.10b-5).
`
`3.
`
`This Court has jurisdiction over the subject matter of this action pursuant to 28
`
`U.S.C. § 1331, and Section 27 of the Exchange Act (15 U.S.C. §78aa).
`
`4.
`
`Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b) and
`
`Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)) as the Company’s principal executive
`
`offices are located in this judicial district and alleged the misstatements and the subsequent
`
`damages took place in this judicial district.
`
`5.
`
`In connection with the acts, conduct and other wrongs alleged in this complaint,
`
`Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,
`
`including but not limited to, the United States mail, interstate telephone communications and the
`
`facilities of the national securities exchange.
`
`PARTIES
`
`6.
`
`Plaintiff, as set forth in the accompanying certification incorporated by reference
`
`herein, purchased SolarWinds securities during the Class Period and was economically damaged
`
`thereby.
`
`7.
`
`Defendant SolarWinds purports
`
`to provide
`
`information
`
`technology (IT)
`
`infrastructure management software products in the United States and internationally. The
`
`Company offers products to monitor and manage network, system, desktop, application, storage,
`
`CLASS ACTION COMPLAINT - 2
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 3 of 17
`
`and database and website infrastructures, whether on-premise, in the public or private cloud, or
`
`in a hybrid IT infrastructure. SolarWinds is a Delaware corporation and its principal executive
`
`offices are located at 7171 Southwest Parkway, Building 400, Austin, Texas 78735.
`
`SolarWinds’s securities trade on the New York Stock Exchange (“NYSE”) under the ticker
`
`symbol “SWI.”
`
`8.
`
`Defendant Kevin B. Thompson (“Thompson”) has been the Company’s Chief
`
`Executive Officer (“CEO”), President, and Director throughout the Class Period.
`
`9.
`
`Defendant J. Barton Kalsu (“Kalsu”) has been the Company’s Chief Financial
`
`Officer (“CFO”), Executive Vice President, and Treasurer throughout the Class Period.
`
`10.
`
`Defendants Thompson and Kalsu are collectively referred to herein as the
`
`“Individual Defendants.”
`
`11.
`
`Each of the Individual Defendants:
`
`a.
`
`b.
`
`directly participated in the management of the Company;
`
`was directly involved in the day-to-day operations of the Company at the
`
`highest levels;
`
`c.
`
`was privy to confidential proprietary information concerning the Company
`
`and its business and operations;
`
`d.
`
`was directly or indirectly involved in drafting, producing, reviewing
`
`and/or disseminating the false and misleading statements and information
`
`alleged herein;
`
`e.
`
`was directly or indirectly involved in the oversight or implementation of
`
`the Company’s internal controls;
`
`f.
`
`was aware of or recklessly disregarded the fact that the false and
`
`CLASS ACTION COMPLAINT - 3
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 4 of 17
`
`misleading statements were being issued concerning the Company; and/or
`
`g.
`
`approved or ratified these statements in violation of the federal securities
`
`laws.
`
`12.
`
`SolarWinds is liable for the acts of the Individual Defendants and its employees
`
`under the doctrine of respondeat superior and common law principles of agency because all of
`
`the wrongful acts complained of herein were carried out within the scope of their employment.
`
`13.
`
`The scienter of the Individual Defendants and other employees and agents of the
`
`Company is similarly imputed to SolarWinds under respondeat superior and agency principles.
`
`14.
`
`Defendant SolarWinds and the Individual Defendants are collectively referred to
`
`herein as “Defendants.”
`
`SUBSTANTIVE ALLEGATIONS
`Materially False and Misleading Statements Issued During the Class Period
`
`15.
`
`On February 24, 2020, the Company filed a Form 10-K for the fiscal year ended
`
`December 31, 2019 (the “2019 10-K”). The 2019 10-K was signed by Defendants Thompson
`
`and Kalsu. The 2019 10-K contained signed certifications pursuant to the Sarbanes-Oxley Act of
`
`2002 (“SOX”) by Defendants Thompson and Kalsu attesting to the accuracy of financial
`
`reporting, the disclosure of any material changes to the Company’s internal control over financial
`
`reporting and the disclosure of all fraud.
`
`16.
`
`The 2019 10-K stating the following risk regarding the Company’s cybersecurity
`
`measures:
`
`The risk of a security breach or disruption, particularly through cyberattacks or
`cyber intrusion, including by computer hacks, foreign governments, and cyber
`terrorists, has generally increased the number, intensity and sophistication of
`attempted attacks, and intrusions from around the world have increased. In
`addition, sophisticated hardware and operating system software and applications
`that we procure from third parties may contain defects in design or manufacture,
`including “bugs” and other problems that could unexpectedly interfere with the
`operation of our systems.
`
`CLASS ACTION COMPLAINT - 4
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 5 of 17
`
`Because the techniques used to obtain unauthorized access or to sabotage systems
`change frequently and generally are not identified until they are launched against
`a target, we may be unable to anticipate these techniques or to implement
`adequate preventative measures. We may also experience security breaches that
`may remain undetected for an extended period and, therefore, have a greater
`impact on the products we offer, the proprietary data contained therein, and
`ultimately on our business.
`
`The foregoing security problems could result in, among other consequences,
`damage to our own systems or our customers’ IT infrastructure or the loss or theft
`of our or our customers’ proprietary or other sensitive information. The costs to us
`to eliminate or address
`the foregoing security problems and security
`vulnerabilities before or after a cyber incident could be significant. Our
`remediation efforts may not be successful and could result in interruptions, delays
`or cessation of service and loss of existing or potential customers that may impede
`sales of our products or other critical functions. We could lose existing or
`potential customers in connection with any actual or perceived security
`vulnerabilities in our websites or our products.
`
`*
`
`*
`
`*
`
` Despite our security measures, unauthorized access to, or security breaches of,
`our software or systems could result in the loss, compromise or corruption of data,
`loss of business, severe reputational damage adversely affecting customer or
`investor confidence, regulatory investigations and orders, litigation, indemnity
`obligations, damages for contract breach, penalties for violation of applicable
`laws or regulations, significant costs for remediation and other liabilities. We
`have incurred and expect to incur significant expenses to prevent security
`breaches, including deploying additional personnel and protection technologies,
`training employees, and engaging third-party experts and consultants. Our errors
`and omissions insurance coverage covering certain security and privacy damages
`and claim expenses may not be sufficient to compensate for all liabilities we
`incur.
`
`17.
`
`On May 8, 2020, the Company filed a Form 10-Q for the quarter ended March 31,
`
`2020 (the “1Q20 10-Q”). The 1Q20 10-Q was signed by Defendant Kalsu. The 1Q20 10-Q
`
`contained signed SOX certifications by Defendants Thompson and Kalsu attesting to the
`
`accuracy of financial reporting, the disclosure of any material changes to the Company’s internal
`
`control over financial reporting and the disclosure of all fraud. The 1Q20 10-Q incorporated by
`
`reference the Company’s description of the cybersecurity risk in ¶16.
`
`CLASS ACTION COMPLAINT - 5
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 6 of 17
`
`18.
`
`On August 10, 2020, the Company filed a Form 10-Q for the quarter ended June
`
`30, 2020 (the “2Q20 10-Q”). The 2Q20 10-Q was signed by Defendant Kalsu. The 2Q20 10-Q
`
`contained signed SOX certifications by Defendants Thompson and Kalsu attesting to the
`
`accuracy of financial reporting, the disclosure of any material changes to the Company’s internal
`
`control over financial reporting and the disclosure of all fraud. The 2Q20 10-Q incorporated by
`
`reference the Company’s description of the cybersecurity risk in ¶16.
`
`19.
`
`On November 5, 2020, the Company filed a Form 10-Q for the quarter ended
`
`September 30, 2020 (the “3Q20 10-Q”). The 3Q20 10-Q was signed by Defendant Kalsu. The
`
`3Q20 10-Q contained signed SOX certifications by Defendants Thompson and Kalsu attesting to
`
`the accuracy of financial reporting, the disclosure of any material changes to the Company’s
`
`internal control over financial reporting and the disclosure of all fraud. The 3Q20 10-Q
`
`incorporated by reference the Company’s description of the cybersecurity risk in ¶16.
`
`20.
`
`The statements referenced in Paragraphs 16-19 above were materially false and/or
`
`misleading because they misrepresented and failed to disclose the following adverse facts
`
`pertaining to the Company’s business, operations, and prospects, which were known to
`
`Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or
`
`misleading statements and/or failed to disclose that: (1) since mid-2020, SolarWinds Orion
`
`monitoring products had a vulnerability that allowed hackers to compromise the server upon
`
`which the products ran; (2) SolarWinds’ update server had an easily accessible password of
`
`‘solarwinds123’; (3) consequently, SolarWinds’ customers, including, among others, the Federal
`
`Government, Microsoft, Cisco, and Nvidia, would be vulnerable to hacks; (4) as a result, the
`
`Company would suffer significant reputational harm; and (5) as a result, Defendants’ statements
`
`about SolarWinds’s business, operations and prospects were materially false and misleading
`
`CLASS ACTION COMPLAINT - 6
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 7 of 17
`
`and/or lacked a reasonable basis at all relevant times.
`
`The Truth Begins to Emerge
`
`21.
`
`On December 13, 2020, Reuters reported that hackers alleged to be working for
`
`the Russian government had monitored email traffic at the U.S. Treasury and Commerce
`
`departments and that the alleged hackers are believed to have gained access to the agencies’
`
`email traffic by deceptively interfering with updates released by SolarWinds, which services
`
`various government vendors in the executive branch, the military, and the intelligence services.
`
`22.
`
`On December 14, 2020, SolarWinds filed a Form 8-K with the SEC, disclosing
`
`that it had been the subject of hack on its Orion monitoring products. The Company stated, in
`
`pertinent part:
`
`SolarWinds Corporation (“SolarWinds” or the “Company”) has been made aware
`of a cyberattack that inserted a vulnerability within its Orion monitoring products
`which, if present and activated, could potentially allow an attacker to compromise
`the server on which the Orion products run. SolarWinds has been advised that this
`incident was likely the result of a highly sophisticated, targeted and manual
`supply chain attack by an outside nation state, but SolarWinds has not
`independently verified the identity of the attacker. SolarWinds has retained third-
`party cybersecurity experts to assist in an investigation of these matters, including
`whether a vulnerability in the Orion monitoring products was exploited as a point
`of any infiltration of any customer systems, and in the development of appropriate
`mitigation and remediation plans. SolarWinds is cooperating with the Federal
`Bureau of Investigation, the U.S. intelligence community, and other government
`agencies in investigations related to this incident.
`
`Based on its investigation to date, SolarWinds has evidence that the vulnerability
`was inserted within the Orion products and existed in updates released between
`March and June 2020 (the “Relevant Period”), was introduced as a result of a
`compromise of the Orion software build system and was not present in the source
`code repository of the Orion products. SolarWinds has taken steps to remediate
`the compromise of the Orion software build system and is investigating what
`additional steps, if any, should be taken. SolarWinds is not currently aware that
`this vulnerability exists in any of its other products.
`
`23.
`
`On this news, the Company’s shares fell $3.93 per share, or 17%, to close at
`
`$19.62 per share on December 14, 2020, damaging investors.
`
`CLASS ACTION COMPLAINT - 7
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 8 of 17
`
`24.
`
`On December 15, 2020, Reuters published an article stating that, last year,
`
`security researcher Vinoth Kumar “alerted the company that anyone could access SolarWinds’
`
`update server by using the password ‘solarwinds123.’” The article also disclosed that, according
`
`to Kyle Hanslovan, the cofounder of Maryland-based cybersecurity company Huntress, “days
`
`after SolarWinds realized their software had been compromised, the malicious updates were still
`
`available for download.”
`
`25.
`
`On this news, the Company’s shares fell $1.56 per share or 8% to close at $18.06
`
`per share on December 15, 2020, damaging investors.
`
`26.
`
`As a result of Defendants’ wrongful acts and omissions, and the precipitous
`
`decline in the market value of the Company’s securities, Plaintiff and other Class members have
`
`suffered significant losses and damages.
`
`PLAINTIFF’S CLASS ACTION ALLEGATIONS
`
`27.
`
`Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
`
`Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons other than defendants
`
`who acquired SolarWinds securities publicly traded on NYSE during the Class Period, and who
`
`were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers and
`
`directors of SolarWinds, members of the Individual Defendants’ immediate families and their
`
`legal representatives, heirs, successors or assigns and any entity in which Defendants have or had
`
`a controlling interest.
`
`28.
`
`The members of the Class are so numerous that joinder of all members is
`
`impracticable. Throughout the Class Period, SolarWinds securities were actively traded on the
`
`NYSE. While the exact number of Class members is unknown to Plaintiff at this time and can be
`
`ascertained only through appropriate discovery, Plaintiff believes that there are hundreds, if not
`
`CLASS ACTION COMPLAINT - 8
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 9 of 17
`
`thousands of members in the proposed Class.
`
`29.
`
`Plaintiff’s claims are typical of the claims of the members of the Class as all
`
`members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
`
`federal law that is complained of herein.
`
`30.
`
`Plaintiff will fairly and adequately protect the interests of the members of the
`
`Class and has retained counsel competent and experienced in class and securities litigation.
`
`Plaintiff has no interests antagonistic to or in conflict with those of the Class.
`
`31.
`
`Common questions of law and fact exist as to all members of the Class and
`
`predominate over any questions solely affecting individual members of the Class. Among the
`
`questions of law and fact common to the Class are:
`
`a.
`
`b.
`
`whether the Exchange Act was violated by Defendants’ acts as alleged herein;
`
`whether statements made by Defendants to the investing public during the Class
`
`Period misrepresented material facts about
`
`the business, operations and
`
`management of SolarWinds;
`
`c.
`
`whether the Defendants’ public statements to the investing public during the Class
`
`Period omitted material facts necessary to make the statements made, in light of
`
`the circumstances under which they were made, not misleading;
`
`d.
`
`whether Defendants caused SolarWinds to issue false and misleading SEC filings
`
`during the Class Period;
`
`e.
`
`whether Defendants acted knowingly or recklessly in issuing false and misleading
`
`financial statements;
`
`f.
`
`whether the prices of SolarWinds securities during the Class Period were
`
`artificially inflated because of defendants’ conduct complained of herein; and
`
`CLASS ACTION COMPLAINT - 9
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 10 of 17
`
`g.
`
`whether the members of the Class have sustained damages and, if so, what is the
`
`proper measure of damages.
`
`32.
`
`A class action is superior to all other available methods for the fair and efficient
`
`adjudication of this controversy since joinder of all members is impracticable. Furthermore, as
`
`the damages suffered by individual Class members may be relatively small, the expense and
`
`burden of individual litigation make it impossible for members of the Class to individually
`
`redress the wrongs done to them. There will be no difficulty in the management of this action as
`
`a class action.
`
`33.
`
`Plaintiff will rely, in part, upon the presumption of reliance established by the
`
`fraud-on-the-market doctrine in that:
`
`a.
`
`SolarWinds shares met the requirements for listing, and were listed and actively
`
`traded NYSE, a highly efficient and automated market;
`
`b.
`
`c.
`
`As a public issuer, SolarWinds filed periodic public reports with the SEC;
`
`SolarWinds regularly communicated with public investors via established market
`
`communication mechanisms, including through the regular dissemination of press
`
`releases via major newswire services and through other wide-ranging public
`
`disclosures, such as communications with the financial press and other similar
`
`reporting services; and
`
`d.
`
`SolarWinds was followed by a number of securities analysts employed by major
`
`brokerage firms who wrote reports that were widely distributed and publicly
`
`available.
`
`34.
`
`Based upon the foregoing, the market for SolarWinds securities promptly digested
`
`current information regarding SolarWinds from all publicly available sources and reflected such
`
`CLASS ACTION COMPLAINT - 10
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 11 of 17
`
`information in the prices of the shares, and Plaintiff and the members of the Class are entitled to
`
`a presumption of reliance upon the integrity of the market.
`
`35.
`
`Alternatively, Plaintiff and the members of the Class are entitled to the
`
`presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State
`
`of Utah v. United States, 406 U.S. 128 (1972), as Defendants omitted material information in
`
`their Class Period statements in violation of a duty to disclose such information, as detailed
`
`above.
`
`COUNT I
`Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder
`Against All Defendants
`
`36.
`
`Plaintiff repeats and realleges each and every allegation contained above as if
`
`fully set forth herein.
`
`37.
`
` This Count is asserted against Defendants based upon Section 10(b) of the
`
`Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.
`
`38.
`
`During the Class Period, Defendants, individually and in concert, directly or
`
`indirectly, disseminated or approved the false statements specified above, which they knew or
`
`deliberately disregarded were misleading in that they contained misrepresentations and failed to
`
`disclose material facts necessary in order to make the statements made, in light of the
`
`circumstances under which they were made, not misleading.
`
`39.
`
`Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that they:
`
`a.
`
`b.
`
`employed devices, schemes and artifices to defraud;
`
`made untrue statements of material facts or omitted to state material facts
`
`necessary in order to make the statements made, in light of the
`
`circumstances under which they were made, not misleading; or
`
`CLASS ACTION COMPLAINT - 11
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 12 of 17
`
`c.
`
`engaged in acts, practices and a course of business that operated as a fraud
`
`or deceit upon Plaintiff and others similarly situated in connection with
`
`their purchases of SolarWinds securities during the Class Period.
`
`40.
`
`Defendants acted with scienter in that they knew that the public documents and
`
`statements issued or disseminated in the name of SolarWinds were materially false and
`
`misleading; knew that such statements or documents would be issued or disseminated to the
`
`investing public; and knowingly and substantially participated, or acquiesced in the issuance or
`
`dissemination of such statements or documents as primary violations of the securities laws.
`
`These defendants by virtue of their receipt of information reflecting the true facts of SolarWinds,
`
`their control over, and/or receipt and/or modification of SolarWinds’s allegedly materially
`
`misleading statements, and/or their associations with the Company which made them privy to
`
`confidential proprietary information concerning SolarWinds, participated in the fraudulent
`
`scheme alleged herein.
`
`41.
`
` Individual Defendants, who are the senior officers and/or directors of the
`
`Company, had actual knowledge of the material omissions and/or the falsity of the material
`
`statements set forth above, and intended to deceive Plaintiff and the other members of the Class,
`
`or, in the alternative, acted with reckless disregard for the truth when they failed to ascertain and
`
`disclose the true facts in the statements made by them or other SolarWinds personnel to members
`
`of the investing public, including Plaintiff and the Class.
`
`42.
`
`As a result of the foregoing, the market price of SolarWinds securities was
`
`artificially inflated during the Class Period. In ignorance of the falsity of Defendants’ statements,
`
`Plaintiff and the other members of the Class relied on the statements described above and/or the
`
`integrity of the market price of SolarWinds securities during the Class Period in purchasing
`
`CLASS ACTION COMPLAINT - 12
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 13 of 17
`
`SolarWinds securities at prices that were artificially inflated as a result of Defendants’ false and
`
`misleading statements.
`
`43.
`
`Had Plaintiff and the other members of the Class been aware that the market price
`
`of SolarWinds securities had been artificially and falsely inflated by Defendants’ misleading
`
`statements and by the material adverse information which Defendants did not disclose, they
`
`would not have purchased SolarWinds securities at the artificially inflated prices that they did, or
`
`at all.
`
`44.
`
` As a result of the wrongful conduct alleged herein, Plaintiff and other members
`
`of the Class have suffered damages in an amount to be established at trial.
`
`45.
`
`By reason of the foregoing, Defendants have violated Section 10(b) of the 1934
`
`Act and Rule 10b-5 promulgated thereunder and are liable to the plaintiff and the other members
`
`of the Class for substantial damages which they suffered in connection with their purchase of
`
`SolarWinds securities during the Class Period.
`
`COUNT II
`Violations of Section 20(a) of the Exchange Act
`Against the Individual Defendants
`
`46.
`
`Plaintiff repeats and realleges each and every allegation contained in the
`
`foregoing paragraphs as if fully set forth herein.
`
`47.
`
`During the Class Period, the Individual Defendants participated in the operation
`
`and management of SolarWinds, and conducted and participated, directly and indirectly, in the
`
`conduct of SolarWinds’s business affairs. Because of their senior positions, they knew the
`
`adverse non-public information about SolarWinds’s corporate governance and business
`
`prospects.
`
`48.
`
`As officers and/or directors of a publicly owned company, the Individual
`
`Defendants had a duty to disseminate accurate and truthful information with respect to
`
`CLASS ACTION COMPLAINT - 13
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 14 of 17
`
`SolarWinds’s business practices, and to correct promptly any public statements issued by
`
`SolarWinds which had become materially false or misleading.
`
`49.
`
`Because of their positions of control and authority as senior officers, the
`
`Individual Defendants were able to, and did, control the contents of the various reports, press
`
`releases and public filings which SolarWinds disseminated in the marketplace during the Class
`
`Period concerning the Company’s corporate governance and business prospects. Throughout the
`
`Class Period, the Individual Defendants exercised their power and authority to cause SolarWinds
`
`to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were
`
`“controlling persons” of SolarWinds within the meaning of Section 20(a) of the Exchange Act.
`
`In this capacity, they participated in the unlawful conduct alleged which artificially inflated the
`
`market price of SolarWinds securities.
`
`50.
`
`By reason of the above conduct, the Individual Defendants are liable pursuant to
`
`Section 20(a) of the Exchange Act for the violations committed by SolarWinds.
`
`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff, on behalf of himself and the Class, prays for judgment and
`
`relief as follows:
`
`A.
`
`Declaring this action to be a proper class action, designating plaintiff as Lead
`
`Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of
`
`Civil Procedure and designating Plaintiff’s counsel as Lead Counsel;
`
`B.
`
`Awarding damages in favor of plaintiff and the other Class members against all
`
`defendants, jointly and severally, together with interest thereon;
`
`C.
`
`Awarding Plaintiff and the Class reasonable costs and expenses incurred in this
`
`action, including counsel fees and expert fees; and
`
`CLASS ACTION COMPLAINT - 14
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 15 of 17
`
`D.
`
`Awarding Plaintiff and other members of the Class such other and further relief as
`
`the Court may deem just and proper.
`
`DEMAND FOR TRIAL BY JURY
`
`Plaintiff hereby demands a trial by jury.
`
`Dated: January 4, 2020
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`STECKLER WAYNE COCHRAN PLLC
`
` /s/ L. Kirstine Rogers
`L. Kirstine Rogers
`Texas Bar No. 24033009
`Stuart L. Cochran (to be admitted)
`Texas Bar No. 24027936
`Barden M. Wayne (to be admitted)
`Texas Bar No. 24075247
`12720 Hillcrest Rd, Suite 1045
`Dallas, Texas 75230
`Telephone: (972) 387-4040
`Facsimile: (972) 387-4041
`Email: krogers@swclaw.com
`
`stuart@swclaw.com
`
`braden@swclaw.com
`
`-and-
`
`THE ROSEN LAW FIRM, P.A.
`Phillip Kim, Esq. (not admitted)
`Laurence M. Rosen, Esq. (not admitted)
`275 Madison Avenue, 40th Floor
`New York, NY 10016
`Telephone: (212) 686-1060
`Fax: (212) 202-3827
`Email: pkim@rosenlegal.com
`lrosen@rosenlegal.com
`Counsel for Plaintiff
`
`CLASS ACTION COMPLAINT - 15
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 16 of 17
`Certification and Authorization of Named Plaintiff Pursuant
`to Federal Securities Laws
`The individual or institution listed below (the "Plaintiff") authorizes and, upon execution
`of the accompanying retainer agreement by The Rosen Law Firm P.A., retains The Rosen
`Law Firm P.A. to file an action under the federal securities laws to recover damages and
`to seek other relief against SolarWinds Corporation. The Rosen Law Firm P.A. will
`prosecute the action on a contingent fee basis and will advance all costs and expenses.
`The SolarWinds Corporation. Retention Agreement provided to the Plaintiff is
`incorporated by reference, upon execution by The Rosen Law Firm P.A.
`
`TIMOTHY
`L
`BREMER
`
` First name:
` Middle initial:
` Last name:
` Address:
` City:
` State:
` Zip:
` Country:
` Facsimile:
` Phone:
` Email:
`
`Plaintiff certifies that:
`
`1. Plaintiff has reviewed the complaint and authorized its filing.
`2. Plaintiff did not acquire the security that is the subject of this action at the direction
`of plaintiff's counsel or in order to participate in this private action or any other
`litigation under the federal securities laws.
`3. Plaintiff is willing to serve as a representative party on behalf of a class, including
`providing testimony at deposition and trial, if necessary.
`4. Plaintiff represents and warrants that he/she/it is fully authorized to enter into and
`execute this certification.
`5. Plaintiff will not accept any payment for serving as a representative party on behalf
`of the class beyond the Plaintiff's pro rata share of any recovery, except such
`reasonable costs and expenses (including lost wages) directly relating to the
`representation of the class as ordered or approved by the court.
`6. Plaintiff has made no transaction(s) during the Class Period in the debt or equity
`securities that are the subject of this action except those set forth below:
`
`Acquisitions:
`
`
`
`
`
`
`7.
`
`Type of Security
`Common Stock
`Common Stock
`
`Buy Date
`09/23/2020
`10/22/2020
`
`# of Shares
`2
`38
`
`Price per Share
`19.93
`21.54
`
`I have not served as a representative party on behalf of a class under the federal
`securities laws during the last three years, except if detailed below. [ ]
`
`I declare under penalty of perjury, under the laws of the
`United States, that the information entered is accurate:
`
`YES
`
`

`

`Case 1:21-cv-00002-RP Document 1 Filed 01/04/21 Page 17 of 17
`
`Certification for TIMOTHY BREMER (cont.)
`
`By clicking on the button below, I intend to sign and execute
`this agreement and retain the Rosen Law Firm, P.A. to
`proceed on Plaintiff's behalf, on a contingent fee basis.
`
`YES
`
`Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform
`Electronic Transactions Act as adopted by the various states and territories of the
`United States.
`
`Date of signing: 01/03/2021
`
`