Two Silicon Valley VC firms, Silver Lake and Thoma Bravo, sold hundreds of millions of dollars in SolarWinds shares just days before the software biz emerged at the center of a massive hacking campaign.
Silver Lake and Thoma Bravo deny anything untoward.
The two firms owned 70 per cent of SolarWinds, which produces networking monitoring software that was backdoored by what is thought to be state-sponsored Russian spies. This tainted code was installed by thousands of SolarWinds customers including key departments of the US government that were subsequently hacked via the hidden remote access hole.
News of the role SolarWinds’ hijacked Orion software played in the hacking spree emerged at the weekend, and on Monday the developer’s share price plummeted more than 20 per cent. It is currently down 22 per cent.
However, around a week before, Silver Lake sold $158m of SolarWinds’ shares and Thoma Bravo sold $128m, according to the Washington Post. The two outfits have six seats on SolarWinds’ board, meaning they will have access to confidential internal information before it is made public. It’s not clear when SolarWinds became aware that its Orion build system had been compromised to include the aforementioned backdoor.
We asked FireEye when precisely it told SolarWinds its Orion updates had been trojanized, and a representative told us: “I’m not able to address the timeline of events.”
There is a plausible explanation for all this: the VCs shed their stock-holdings on the same day SolarWinds’ long-standing CEO resigned.
The software house announced in August that Kevin Thompson would leave the company though it didn’t give a date. Thompson reportedly quit on Monday, December 7 – news that was not made public – and a new CEO was formally announced two days later, on December 9, the day after FireEye went public on December 8 with details of the intrusion into its own systems.