Ripple blasts SEC as “biggest decision” in XRP lawsuit looms

Rick Steves

“…The SEC’s protean approach to litigating this issue only underscores why the Speech drafts and related communications are important and highly relevant for purposes of discovery to which Defendants are in any event entitled.”

Ripple and individual defendants Brad Garlinghouse and Chris Larsen have filed a letter in opposition to the SEC’s motion for partial reconsideration and clarification in regard to the court’s DPP ruling.

Earlier this month, the plaintiff filed the much-expected motion seeking the judge to overturn her own decision of ordering the SEC to hand over drafts, notes, and emails about Hinman’s 2018 speech, which was found not to be protected by deliberative process privilege because the SEC said the speech was only his “personal opinion”. Now, the SEC is arguing the speech was public “guidance”.

SEC’s protean approach underscores importance

Ripple’s counsel responded by calling the SEC’s motion an “inappropriate attempt at a do-over simply because it is unhappy with the Court’s order on its prior briefing”.

“The SEC makes no pretense that the demanding standard for reconsideration is satisfied here. Instead, it seeks to yet again brief an issue that has been extensively litigated for nearly a year, but this time based on a new theory, in a reversal-of course.

“Ignoring its prior briefing and a sworn declaration it procured from Former Director of Corporation Finance William Hinman—in which the SEC maintained that Mr. Hinman’s Speech simply expressed the “personal views” of the speaker (a position the SEC now knows cannot support its privilege claim)—the SEC now argues for the first time that the Speech was the culmination of and reflected a policy process within the Division of Corporation Finance. This reversal contradicts Mr. Hinman’s sworn statement.

“Likewise, with neither permission nor apology, the SEC submits a brand-new 5-page declaration—in blatant violation of the local rules—from someone who has no first-hand knowledge of the matters attested to.

“And for all its tactics, the SEC ultimately fails to establish that this Court’s January 13, 2022 Order was in error. The SEC cannot show that the Court overlooked any factual matters before it: the Court considered and credited both Mr. Hinman’s sworn statements and the SEC’s representations that the Speech expressed Mr. Hinman’s “personal views.”

“Moreover, the Court already recognized that SEC staff were involved in discussions around the Speech and determined that those discussions were “merely peripheral” to actual policy-making. Additional discussion (presumably contained within the SEC’s self-selected documents) does not alter the analysis. The DPP still would not attach because those communications were not an “essential link” in a “specific consultative process.”

“At most, given that the discussions apparently all concern what should be said in the Speech itself, they were “merely peripheral to actual policy formation.” Finally, the SEC’s protean approach to litigating this issue only underscores why the Speech drafts and related communications are important and highly relevant for purposes of discovery to which Defendants are in any event entitled.”

“Hardest hitting brief thus far in the litigation”

Jeremy Hogan, Partner at the Hogan and Hogan law firm, has commented on Ripple’s reply to the SEC’ motion first by expressing the well-written brief that dismantles the many contradictions made by the SEC in regard to Hinman’s speech.

“Wow. I expected Ripple to come out swinging and this brief did not disappoint. This is the hardest-hitting brief thus far in the litigation – and rightfully so. The SEC has spun itself a tangled web here and I don’t expect the judge to help them out of it.”

The biggest decision in SEC v. Ripple

John Deaton, the attorney representing 65,000 XRP Holders in the SEC v. Ripple lawsuit after having been granted Amicus Curiae status, has previously explained why “Judge Netburn’s decision on the motion for reconsideration will be the biggest decision in the Ripple case“.

In regard to the brief, Deaton said, “Ripple lawyers are professional and very tactful in explaining that if the Court were to accept the SEC’s new theory regarding the speech (that it’s the Division’s opinion, not Hinman’s), then the Court must accept that Hinman lied under oath.”

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