It’s Ripple’s fault, says the SEC on recordings of XRP sales meetings
The SEC’s bad timing – we’re close to the discovery deadline – may work in favor of Ripple’s interests, but the Judge is expected to compel Ripple to produce evidence that will form the backbone of the SEC’s case.
The dispute over Ripple’s recordings continues.
The SEC wants to get a deeper look at what went down on key meetings that involved Chris Larsen and Brad Garlinghouse as well as other employees.
The agency plans to use the recordings as evidence that Ripple knowingly and recklessly marketed and sold XRP as an investment contract, therefore, a security.
Time is running out as the discovery deadline is fast approaching and that is to Ripple’s advantage, but the court may still allow a limited search that could bring out new and compromising revelations.
The SEC has stated before that the recordings it already has in its possession are key to its claims against Ripple in court.
The plaintiff has recently filed a reply in support of its letter seeking an order compelling Ripple to conduct a “reasonable search” of relevant video and audio-taped recordings of internal Ripple meetings.
The SEC argued that Ripple’s conduct necessitated this motion: “Ripple failed to search its library of recordings—or even inform the SEC that it was withholding responsive recordings—until its former Chief Compliance Officer testified in the last month of fact discovery that Ripple maintained such recordings.
“In its prior motion to the Court concerning recordings, the SEC expressly reserved the right to seek the Court’s intervention as to the scope of Ripple’s search for responsive documents if the parties could not reach
agreement.
“And indeed Ripple’s search is not reasonably designed to identify responsive recordings as to the 33 agreed custodians. Ripple has chosen to maintain some recordings in generically-named locations and claims that a comprehensive search of such locations for all responsive documents is burdensome.
“For example, Ripple claims there are “over 200” recordings with generic meeting titles but that somehow reviewing each one is not reasonable. Ripple need only have the recordings transcribed and then search the transcribed text to conduct an efficient and effective search”, the SEC argued, adding that Ripple does not seriously challenge the relevance of the recordings.
The SEC also asked the court to deny Ripple’s request to seal the transcripts of audio and video-taped recordings. “The documents have the tendency to influence the Court’s ruling on the discovery dispute before it, and no countervailing business or privacy interests outweigh their disclosure to the public”, the agency argued.
We have recently covered Ripple’s attempt to stop the SEC from getting those recordings, but even XRP community-friendly attorney Jeremy Hogan has said the recordings dispute is “not looking good for Ripple” and “will form the backbone of the SEC’s case.”
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