“One client remains in the storm’s eye, reluctant to be swept away by the legal tempest, and the SEC stands ready to counter any challenge,” suggests a footnote from Monday’s proceedings.
Digging Deeper: From Cyberattack to Legal Tussle
The saga’s inception traces back to a sweeping cyberattack in November 2020 that targeted Microsoft Exchange email servers, an assault linked to Chinese military espionage. Covington emerged from the shadows when the SEC, in a dynamic move, slapped the firm with a lawsuit in January. The charge? Not adhering to a subpoena to expose the names of clients who might’ve faced data breaches.
Rising to Covington’s defense, the firm armed itself with the attorney-client privilege shield. The legal world witnessed a striking unity, with over 80 prominent law firms rallying behind Covington. They contested that the SEC, driven by mere inquisitiveness, was trying to sidestep confidentiality pillars to determine if any securities laws were broken following the cyberattack.