A Ripple XRP Liquid Index trades on the Nasdaq Exchange, and closed Tuesday at $0.884, down from the $0.941 opening price.
Ripple had been seeking “either anonymized or aggregated documents reflecting the SEC’s trading preclearance decisions with respect to its employees’ transactions in Bitcoin, Ether, or XRP, and either redacted or aggregated annual certifications concerning SEC employees’ XRP holdings,” the motion states.
The broader case against Ripple Labs concerns Co-founder and former CEOChristian Larsen and current CEO Bradley Garlinghouse allegedly raised $1.3bn “beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S.
Judge denies sec ripple
Sarah Netburn on the SEC’s motion for reconsideration, dubbed “the largest decision” in the case by Cryptolaw founder, John Deaton, is still being awaited by Ripple and the XRP community. The XRP holders’ attorney says of this, ”I also believe Judge Netburn’s rulings on the 63 emails and the Estabrook notes (might) come down any day.” XRP holders believe the release of these notes might help bolster Ripple individual defendants’ testimony on the lack of regulatory clarity.
The ”Estabrook notes” were taken during a 2018 meeting between Elad Roisman and Brad Garlinghouse, which came into the limelight in January 2022, when Estabrook cleaned out his desk as he prepared to leave his position at the SEC.
Ripple had filed a motion in February to compel the SEC to turn over the Estabrook notes when the agency claimed the deliberative process privilege (DPP).
The SEC described this ruling as a win for them, despite having their motion denied. In a letter to Judge Sarah Netburn of the Southern District of New York, the watchdog said the ruling has made documents under the deliberative procedure privilege (DPP) irrelevant to the case.
Ripple has been going after documents that can show internal communications between SEC staff regarding whether they considered XRP and other digital assets as securities. The regulator has been fighting back claiming they are protected under the DPP privilege.
“…the Order answers any question as to whether the SEC’s internal documents are relevant to the Individual Defendants’ scienter.
Judge denies sec ripples
SEC counsel in drafting his Speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law.”
The draft of the Hinman speech, which the SEC has fought to keep under wraps, has been seen by many in the XRP community as a pivotal piece of evidence that could work in favor of Ripple Labs.
The SEC sued blockchain firm Ripple in late 2020 on allegations that senior executives Brad Garlinghouse and Christian Larsen sold Ripple’s XRP tokens as unregistered securities.
However, Ripple has argued that the speech made by former director of the Division of Corporation Finance Bill Hinman in 2018 stated that Ether (ETH) did not constitute “securities transactions” — contradicted to the SEC’s stance on the matter.
This was not even a nuanced opinion.
Crypto-Law John E Deaton told his 205,000 followers on July 12 that the appeal, along with Ripple’s objection, would come within 30 days. He also believes the appeals judge will side with Judge Netburn’s recent ruling.
If there are no extensions granted, Judge Torres will have the SEC’s appeal and Ripple’s objection to the appeal in 30 Days.
After Judge Torres upholds Judge Netburn’s decision, the SEC can ask Judge Torres to certify an appeal to the 2nd Circuit. She is likely to deny doing so. https://t.co/HtMjbjk2OK
— John E Deaton (205K Followers Beware Imposters) (@JohnEDeaton1) July 13, 2022
The SEC continues to insist that Hinman’s speech was a “purely personal errand” that was not meant to offer legal advice.
Judge Netburn acknowledged that this could potentially protect the drafts if Hinman were a private citizen.
Judge Sarah Netburn denied the SEC’s motion to protect Hinman’s internal notes and emails under attorney-client privilege.
Judge Sarah Netburn ruled against the SEC’s motion to protect the William Hinman documents. This is considered a decisive win in the latest SEC v.
Ripple ruling. Analysts believe the XRP price could continue its uptrend if it crosses the $0.48 level.
Also read:SEC v.
Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position.”
A very big win for Ripple
Regarding the latest decision by the judge, Mr. Filan noted “this is a very big win for Ripple” and that the SEC now has 14 days to file an objection to this decision.
This is a very big win for Ripple.
— James K.
Filan 🇺🇸🇮🇪90k+ (beware of imposters) (@FilanLaw) April 11, 2022
Notably, Finbold reported on April 9 that the new emails proved SEC’s conflict of interest in crypto regulation as nonprofit organization Empower Oversight made public SEC emails detailing improper conduct by the agency’s officials concerning the Ripple (XRP) lawsuit.
Moreover, the court defined that the emails were “neither pre-decisional nor deliberative.” Ripple then filed the motion for reconsideration and clarification to challenge that decision.
The SEC cannot reject its own position
In the most recent ruling, the judge says that the SEC seeks to “minimize” the fact that it has distanced itself from the speech.
The SEC’s deliberations concerning cryptocurrency regulations were occurring separately and in parallel to the speech. The judge claims that the plaintiff conflates emails that comprised those parallel deliberations with those emails and edits that merely mention them.
The court has concluded that the Hinman speech was not an agency communication, which is why the deliberations are not protected by the DPP.
In this case, the final court ruling is at the heart of the SEC’s case.
Initially, Matthew Solomon, Ripple’s lead attorney, has argued that the SEC has changed positions in the case to suit their interests.
SEC’s conflict of interest
As previously reported by Finbold, new emails emerged proving SEC’s conflict of interest. The emails were accessed by a nonprofit organisation, Empower Oversight, which made public SEC documents detailing improper conduct by some officials concerning the Ripple lawsuit.
According to the emails, former SEC official Hinman was warned about a potential conflict of interest with his previous employer, Simpson Thacher.
Ripple has generally expressed confidence that the final ruling will favour the firm.
In addition, the judge slammed the attempt to withhold the documents as “hypocrisy.” In that, the agency argued Hinman’s speech was not relevant to the market’s understanding of cryptocurrency regulation while at the same time claiming that Hinman had sought legal advice in drafting the speech.
Ripple’s case boosted
The filing added that communications between Hinman and the SEC’s lawyers were more accurately classified as “policy advice,” such as whether a statement is a good or bad idea.
“The law is settled that policy advice—like whether it is a good idea or a bad idea to make a particular public statement as a public figure—or communication advice—like whether a statement is on-message with the agency’s position.”
Judge Netburn wrote that policy advice is distinct from legal advice, even if the advice is coming from a lawyer.
For context, Ripple’s defense posits that the SEC did not provide fair notice that its coin distribution was illegal. In April of last year, the SEC filed to strike this defense.
When a presiding judge struck down this filing, it meant the case was progressing into a trial stage.
That had XRP crypto fans lofting the news as a huge deal. However, what these investors were not aware of was the judge also struck down a Ripple filing.
It’s easy to understand why, with only one half of this news, XRP fans were ready to celebrate.
If the judge were only striking down the SEC’s motion, it would seem likely for Ripple to win.
In her ruling, Judge Torres said Ripple is entitled to assert its fair notice defense and have it adjudicated before the SEC may impose liability.
For the judge to side with the SEC on its motion, it would have had to show that there is no question of fact and/or law which might allow the defense to succeed and that it would be prejudiced by the inclusion of the defense.
Judge Torres cited a precedent set in a 2012 ruling between Fox Television and the FCC stating: “A fundamental principle in our legal system is that laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”
As such, Ripple can still push on with its fair notice defense and can use it to win the lawsuit.
Ripple was quick to claim the ruling was a victory for the company.