On March 30, 2021, the market was made aware of a data breach through the publishing of an article titled “Whistleblower: Ubiquiti Breach ‘Catastrophic’.” In this article, a source internal to Ubiquiti stated that the Company had downplayed a data breach that gave hackers access to Ubiquiti’s user credentials and single sign-on (SSO) cookies. This report is in direct contradiction of former statements by the Company which made the data breach out to be less severe than it actually was.
On this news, the Company’s stock price fell $50.70, or 14%, to close at $298.80 per share on March 31, 2021.
The complaint alleges that Ubiquiti made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. The Defendants statements concerning the data breach, failed to disclose to investors: (1) that the Company had downplayed the data breach in January 2021; (2) that attackers had obtained administrative access to Ubiquiti’s servers and obtained access to, among other things, all databases, all user database credentials, and secrets required to forge SSO cookies; (3) that, as a result, intruders already had credentials needed to remotely access Ubiquiti’s customers’ systems; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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