Is the SEC concerned about what Hinman’s deposition could disclose in the XRP lawsuit?

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In the last few weeks, the SEC v. Ripple Labs case has seen the latter publicly declare its plan to depose a former SEC officer, William Hinman. Although the SEC was quick to file a request to dismiss the deposition, it has now followed up with another response in support of the motion.

As per the SEC’s latest reply to the same, defendant Ripple Labs’ opposition letter began with an “incorrect premise” that the SEC must show why a subpoena should be quashed. It added,

“I fact, it is Defendants who bear the heavy burden of demonstrating“exceptional circumstances” sufficient to justify such a deposition under United States v. Morgan, 313 U.S. 409, 422 (1941) and Lederman v. N.Y. City Dept. of Parks & Recreation, 731 F.3d 199, 203 (2d Cir. 2013).”

Ripple, according to the agency, failed to establish that Hinman had “unique first-hand knowledge” of XRP offers and sales, as previously indicated. It went on to say,

“The only topic on which Defendants even claim (incorrectly) that Director Hinman has “unique first-hand knowledge” is “the circumstances under which he prepared and gave his [Ether] speech and the agency’s treatment of the speech after the fact”

Even if such an investigation is permitted, it will require the SEC to dive into non-public, internal considerations that are shielded by the deliberative process and other rights.

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The agency then doubled down on its stance, requesting Ripple to show a case in which the deposition of an SEC officer of Director Hinman’s status was permitted. According to the SEC, such cases are frequently invalidated by the courts.

In fact, the most recent response accused Ripple of attempting to persuade the Court to enact new rules by demanding a deposition of a high-ranking official to interrogate him about “external meetings (about which they could depose other participants) and internal SEC deliberations that are privileged.”

“Director Hinman should not have to endure a lengthy deposition, dominated by the SEC’s assertions of privilege before Defendants challenge the SEC’s privilege assertions before the Court.
The SEC’s motion to strike Ripple’s fair notice defense (D.E.128) is pending and may render the deposition of Director Hinman irrelevant.”

It is worth remembering that the SEC previously decided that such a deposition would be a “waste of time.” However, the case may be heard in a court of law, and we will have to wait for the Court’s judgement.

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Needless to say, reactions were fast and vociferous, with attorney Jeremy Hogan stating unequivocally what the SEC’s current letter’s point is,

 

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