The SEC Declares Internal Documents “Irrelevant” Following the Failure of the Ripple Executives’ Motion.
Highlights
- The SEC wrote to Magistrate Judge Sarah Netburn supporting its partial reconsideration and clarification motion.
- The SEC wants to win support for its request once the defendants have clarified their views. Having access to the communications may help the defendants refute future agency assertions about the XRP cryptocurrency’s regulatory status.
- U.Today reports that Ripple was able to persuade the court that the agency’s communications regarding former top SEC staffer William Hinman’s big Ethereum speech were not protected because they were essentially his own thoughts.
According to U.Today, Ripple was successful in persuading the court that the agency’s communications related to former top SEC employee William Hinman’s major Ethereum speech were not shielded since they were essentially his personal opinions, rather than those of the agency. However, the regulator is battling to keep these emails from being made public as well.
A recent letter to Magistrate Judge Sarah Netburn from the Securities and Exchange Commission argued that its internal records were no longer relevant because Ripple leaders, CEO Brad Garlinghouse and co-founder Chris Larsen, failed to dismiss the lawsuit.
Responding to the SEC’s letter supporting its motion for partial reconsideration and clarification, the defendants will be given the opportunity to clarify their positions.
With this letter, the SEC hopes to gain support for the agency’s present motion for partial reconsideration and clarification of the court’s January 13 decision.
It was claimed by the defendants that the plaintiff had wanted a “do-over” because it had been dissatisfied with the prior ruling in the case.
The proposed “scienter test” was rejected by the court, which ruled that the plaintiff did not have to prove that the individual defendants were aware of or intentionally disregarded the fact that their XRP transactions were in violation of securities laws.
As far as Ripple is concerned, Hinman’s speech is “very significant” to the discovery process. The defendants’ ability to obtain the emails may make it easier for them to rebut the agency’s statements about the XRP cryptocurrency’s regulatory status in the future.
So the SEC claims that the court should not require it to turn over its internal documents, regardless of whether or not they are covered by the deliberative process privilege (DPP).
As a result of denying the executives’ motion to dismiss the complaint last week, the SEC contends that Federal Judge Analisa Torres effectively resolved their dispute in the agency’s favor.
