292 Interactions, 4 today
Every other day, it appears like a big development in the ongoing litigation between the United States Securities and Exchange Commission and Ripple Labs is on the horizon. The SEC has now filed a fresh move before the court of Judge Sarah Netburn, demanding an order enabling more depositions.
Furthermore, the agency is requesting that the court order Ripple to review the records of other custodians, as well as requiring that the defendants submit details of post-complaint XRP transactions and lobbying attempts.
The aforementioned filing, the sheer scope of it, was met with a lot of surprise by many in the community, especially since there were some rumors of a possible settlement after the teleconference on Friday.
According to the SEC’s submission, its request for additional discovery is in proportion with the “needs of the case,” with the agency adding that “key components of Ripple’s unlawful distribution of XRP was diffused through multiple employees.” The SEC, the motion went on to argue, wants to obtain critical information on 1) Creation and promotion of an XRP trading market, 2) Ripple’s communications with market participants to ascertain whether Ripple offered ‘investment contracts’ under Howey.
The SEC is now seeking to depose Ron Will, Ethan Beard, Phil Rapoport, and Ryan Zagone, among others, since they will have “non-duplicative knowledge of critical issues,” according to the application.
Perhaps most tellingly, the SEC’s lawyer, Jorge Tenreiro, has also asked the court to release some papers dated after the SEC’s case against Ripple Labs was filed. According to Tenreiro, though Ripple has consistently claimed that its efforts had no effect on the price of XRP, the company has admitted to utilising publicly accessible data regarding the price of XRP after the complaint was filed to support its points.
“Given these arguments and Ripple’s refusal to limit its expert opinion to pre-Complaint XRP prices, Ripple should be ordered to produce documents relating to its activities as to XRP since the Complaint was filed, so that the SEC may rebut Ripple’s arguments that there was no correlation between its own activities and the price of XRP.”
Finally, the SEC has now also requested the Court to have Ripple Labs produce evidence of its “lobbying efforts to affect public perception on the regulatory status of XRP.” The filing claimed,
“Since Ripple has put at issue its purported lack of “fair notice” based on the beliefs of market participants, the SEC is entitled to test whether the supposed “confusion” was bought and paid for by Ripple, as opposed to a reflection of genuine market sentiment.”
The reactions to the SEC’s submissions, understandably, were strong, with one user tweeting,
“Looks like the SEC is ramping up its fishing expidition bc, like @attorneyjeremy1 said, they’re scared of the “Fair Notice” defense. I sense they don’t feel they have enough to defeat that defense atm so time to through out the fishing net?”