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We present an ethnographic study of secure software development processes in a software company using the anthropological research method of participant observation. Two PhD students in computer science trained in qualitative methods were embedded in a software company for 1.5 years of total research time. The researchers participated in everyday work activities such as coding and meetings, and observed software (in)security phenomena both through investigating historical data (code repositories and ticketing system records), and through pen-testing the developed software and observing developers’ and management’s reactions to the discovered vulnerabilities. Our study found that 1) security vulnerabilities are sometimes intentionally introduced and/or overlooked due to the difficulty in managing the various stakeholders’ responsibilities in an economic ecosystem, and cannot be simply blamed on developers’ lack of knowledge or skills; 2) accidental vulnerabilities discovered in the pen-testing process produce different reactions in the development team, often times contrary to what a security researcher would predict. These findings highlight the nuanced nature of the root causes of software vulnerabilities and indicate the need to take into account a significant amount of contextual information to understand how and why software vulnerabilities emerge during software development. Rather than simply addressing deficits in developer knowledge or practice, this research sheds light on at times forgotten human factors that significantly impact the security of software developed by actual companies. Our analysis also shows that improving software security in the development process can benefit from a co-creation model, where security experts work side by side with software developers to better identify security concerns and provide tools that are readily applicable within the specific context of the software development workflow.