246 Interactions, 2 today
The Securities and Exchange Commission (SEC) case against Ripple Labs, as well as executives Brad Garlinghouse and Chris Larsen, seems to have taken an unusual turn. According to James Filan, a retired federal prosecutor and defence counsel, the Commission may have circumvented certain rules to its advantage.
#XRPCommunity #XRP #SEC v. #Ripple @sentosumosaba BREAKING: DISCOVERY DISPUTE REGARDING #SEC CONTACTING FOREIGN REGULATORS AND SEEKING DISCOVERY OUTSIDE RULES OF FEDERAL PROCEDURE AND HAGUE CONVENTION. LETTER MOTION ATTACHED.https://t.co/53ytaZCjTi
— James K. Filan (@FilanLaw) April 16, 2021
The SEC seems to be “pursuing discovery” on Ripple from the United Kingdom Financial Conduct Authority (FCA). This practise is known as Memorandums of Understanding (“MOU”), and it breaks the Hague Convention, according to a document filed with the Southern District of New York and Magistrate Judge Sarah Netburn.
The paper, which was launched by Ripple Labs legal counsel, states that the SEC has at least 11 MOUs requesting documentation from “overseas entities.” According to the paper, “many” of these companies are payments industry business partners, as well as about ten foreign regulators.
The prosecution characterises the procedure as “improper” and part of a “intimidation tactic” to allegedly limit Ripple’s ability to do business outside of the United States. According to the document:
Not only is the use of pre-litigation investigative tools prejudicial to Defendants and the recipients of such requests, as described below, it also prevents this Court from exercising its lawful discretion regarding the scope of permissible foreign discover.
Behind the judge’s back, the SEC violated U.S. civil court rules by issuing multiple “MOUs” to obligate foreign govts to obtain files from @Ripple‘s foreign business partners. They got caught.
Read the full letter to Judge Netburn here 👇https://t.co/9P7wIMfTr8
— CryptoLaw (@CryptoLawUS) April 16, 2021
SEC “unjust” advantage in XRP case?
In response to the disclosure, lawyer Jeremy Hogan said that the SEC is exerting indirect “regulatory pressure” on Ripple and its partners. Hogan stated that the Commission is the only party capable of employing such a strategy:
“This is NOT something a “typical” Plaintiff could do and it’s not fair, so Ripple is calling dirty-poker (…). (former prosecutor), this is typical government prosecutorial pressure-litigation, applying pressure not only to you but your business friends as well.”
Jesse Hynes, General Counsel for Gala Games, also voiced his view, calling the regulator’s action “insane.” Hynes emphasised the significance and implications of this lawsuit for the crypto industry, saying:
“Shame on the SEC! On the bright side, the SEC is basically admitting that this is a matter of great political and worldwide significance. Can’t wait for that Summary Judgment motion with a major questions doctrine argument.”
After a strong rebound in recent days, XRP is now trading at $1.64, representing an 8.9 percent correction. On the weekly and monthly charts, XRP is profitable at 55.9 percent and 255.2 percent, respectively.