107 Interactions, 4 Today
The feud between the US Securities and Exchange Commission and San Francisco-based fintech firm Ripple Labs shows no signs of abating. The defendants asked the court to consider statements made by two of the agency’s commissioners, Hester Peirce and Elad Roisman, in their 20 July filing. According to the firm, these statements are “supplemental authority in support of Ripple’s opposition to the SEC’s pending motion to strike Ripple’s fair notice defence.”
However, the SEC quickly retaliated, citing five reasons why the defendants’ latest arguments should be rejected.
The individual defendants in the case, Garlinghouse and Larsen, have now filed their own response. The SEC’s response, according to the two, “went on to publicly rebuke these two Commissioners’ considered views” that there is no clarity. Attorney James Filan first brought the development to the community’s attention.
#XRPCommunity #SECGov v. #Ripple #XRP Individual Defendants respond to SEC’s letter regarding public statement by Commissioners Peirce and Roisman, describing SEC response as going “on to publicly rebuke these two Commissioners’ considered views” that there is no clarity. pic.twitter.com/sTVjbZpAHF
— James K. Filan ???? (@FilanLaw) July 23, 2021
Despite the SEC’s assertions, the two claim that there is a “decided lack of clarity for market participants around the applications of the securities laws to digital assets and their trading.” The SEC is “gratuitously” attempting to re-argue its “meritless” and flawed position with its response that appears to attack the Commissioners’ statement, it added.
The defendants also claimed that the SEC failed to prove or support its charges of “aiding and abetting.” According to these claims, the defendants “knew or were reckless in failing to conclude that XRP was a security as long as eight years ago.” However,
“…Yet even today two of the five commissioners of the agency acknowledge that questions and confusion persist in the marketplace.”
The response also argued that charges against individual defendants should be decided using the Howey Test. According to the agency’s letter, this was true in the cases of Kik, Telegram, and the NAC Foundation. Larsen and Garlinghouse, on the other hand,
“…the Kik and Telegram cases did not involve any claims against individual defendants. And the NAC Foundation case did not involve claims of aiding and abetting under section 15 of the Securities Act.”
The fact that the SEC’s arguments revolve around the statements of its own commissioners highlights the SEC’s position, it concluded.
Although the statement by Commissioners Peirce and Roisman was a blessing for Ripple, it is even doubly so for the individual Defendants for which the SEC has to prove that they KNEW or RECKLESSLY disregarded Securities laws. Expect to see the Ripple reply shortly. https://t.co/bG93w98MDB
— Jeremy Hogan (@attorneyjeremy1) July 23, 2021