528 Interactions, 16 today
Following Judge Analisa Torres’ approval of John Deaton’s request to intervene on behalf of XRP holders, the claimants and defendants in the pending litigation between the US SEC and Ripple Labs and its executives were ordered to file their replies by May 3rd. Following the defendants’ actions, the enforcement agency has now lodged its 33-page opposition report.
As predicted, the SEC’s stance on the XRP holders’ motion to interfere differs greatly from that of the defendants.
According to the SEC, what the movers have done is “re-style” their withdrawn Mandamus petition as an immediate motion for action against the SEC. According to the agency’s memorandum of rules,
“Movants claim that, as secondary market XRP investors, they are somehow “unnamed defendants”— even though this particular action does not charge transactions between individuals in the secondary market as violations of Section 5.”
While Ripple and its executives requested in their response to the aforementioned motion that the movers be able to join as amici or as intervenors with “limited participation rights,” the SEC asserted,
“Movants should not be permitted to broaden the scope of the SEC’s claims by intervening in this action in any capacity.”
Such “interference,” the SEC argued, is “constitutionally and statutorily prohibited,” and would therefore infringe on the executive branch’s “prosecutorial discretion.”
Surprisingly, the SEC alleged in its opposition to the motion that the movers had “essentially recited” the defendants’ litigation status. It went on to say,
“Movants show that their interests (if any) are not adequately protected by Defendants given that Movants’ objectives are the same as Defendants.”
The SEC’s argument runs directly counter to what both the defendants and the intervenors have said. While the latter had claimed that “XRP Holders cannot rely on the Defendants’ efforts in this case,” the former parties in their own response to the said motion argued,
“As independent holders, developers, and users of XRP, with no relationship to Defendants, they have strong and distinct interests in the regulatory status of XRP. This Court’s ruling may determine those interests; at minimum, it will affect them.”
The SEC ended its points by citing “practical” grounds, all of which it had previously already addressed in its original motion challenging the intervenors’ motion. According to the organisation,
“An SEC enforcement action with thousands of individual investors intervening on both sides to advance legal and factual arguments the SEC and Defendants are capable of making would unnecessarily complicate this action, cause undue delay, require additional judicial resources, and prejudice the SEC’s efforts to enforce the federal securities laws.”
John Deaton, who represents XRP holders known as the Movants, now has until May 17th to answer to both the SEC and Ripple’s claims.