Cringe: SEC fails at basic math against Ripple in report on XRP news

Rick Steves

“97 out of 500 ‘news’ price rises accounts for around 20% of the data. It was observed that 40% of BTC/ETH moves resulted in $XRP moves. Last time I checked, 40% is more than 20%.”

In the most recent event in the SEC v. Ripple case, the plaintiff filed its response to Ripple’s motion to strike the Metz Supplemental Expert Report.

The very dispute is taking place because the Court allowed each expert witness to submit a report and then a rebuttal report only. The SEC, however, chose to add a “supplemental” report – which can be interpreted as a second rebuttal, hence RIpple’s motion to strike.

SEC’s triple fail: proper procedure, deadline, and basic math

The SEC is now arguing that the rules governing motions to exclude expert discovery favor the plaintiff, and precluding the supplemental report, a statistical analysis of the economic significance of Ripple’s news announcements, would confer an unwarranted advantage on the defendants. In conclusion, the agency believes the opinions by Dr. Metz should not be stricken nor precluded.

“What a poorly written response. It’s repetitive (a sign of a weak argument), it wrongly accuses Ripple of failing to follow proper procedure when the failure was the SEC’s, and, almost comically, offers to consent to reopening a deadline the SEC blew”, commented attorney James K. Filan, who is following the case.

It is not only the SEC’s inconsistencies in response to Ripple’s motion to strike that are coming under fire. The report itself has been found to fail at basic math.

Twitter user @TheXRPArsenal pointed out that “97 out of 500 ‘news’ price rises accounts for around 20% of the data. It was observed that 40% of BTC/ETH moves resulted in $XRP moves. Last time I checked, 40% is more than 20%.

“In addition, 40% of the 7 years that were analyzed equates to 1022 days. 10x the amount of days that Dr. Metz states that $XRP was subject to positive movement due to ‘Ripple news’. These stats just serve to prove $XRP is more bound to the wider market than Ripple.”

Below is the transcript of the SEC’s statistical findings on XRP news:

“In his initial Report, Dr. Metz was asked to analyze XRP’s price movements and assess whether actions by Ripple impacted XRP’s price. Accordingly, Dr. Metz conducted an event study that identified more than 500 separate news announcements by Ripple (or news items about Ripple linked to Ripple’s website) and employed a scientifically-accepted statistical analysis to examine whether the price of XRP increased in response to several categories of positive news about Ripple or XRP.

“Dr. Metz found that the price of XRP rose significantly in response to: 8 key milestone events, 5 listings of XRP on new trading platforms, 77 Ripple customer and product developments, and 7 Ripple commercialization initiatives. Dr. Metz also identified 105 days in which positive Ripple news events were correlated with significant abnormal (positive) XRP price returns that could not be explained by random chance.

“Finally, Dr. Metz examined the relationship between XRP prices and the prices of Bitcoin and Ether, in order to determine whether the price movements of XRP over time followed the price movements of those other tokens. Dr. Metz concluded that, between 2014 and 2020, the price movements of those two tokens (BTC and ETH) were correlated with only 40% of XRP’s price movements.”

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