Ripple to win “Estabrook Notes” even if it loses motion, says expert

Rick Steves

“The SEC is dead on the fact that Garlinghouse left that meeting feeling that he and Ripple weren’t doing anything wrong.”

Ripple, via defendant Brad Garlinghouse, has filed a response to the SEC’s opposition to the motion to compel the production of the “Estabrook Notes”.

The document contains notes of a 2018 meeting between former SEC Commissioner Elad Roisman and the Ripple chief executive Brad Garlinghouse.

The defendants seek disclosure of the notes in order to prove that Ripple executives made efforts to stay compliant with the US securities law.

A few days ago, both XRP community-friendly attorneys John Deaton and Jeremy Hogan agreed that the SEC is likely to win the battle over the “Estabrook Notes”.

Exculpatory evidence

The defendant’s letter to the court says “the SEC ignores the central reason that Mr. Garlinghouse seeks disclosure of the Estabrook notes: they are likely to corroborate his account of a discussion that he had with a Commissioner of the SEC regarding the regulation of digital assets, an issue that goes to the core of the SEC’s “knowledge or recklessness” allegations against him.

“The SEC is silent on this point—and notably does not dispute its intent, at trial, to seek to undermine Mr. Garlinghouse’s credibility regarding his recollection of that meeting and others. The SEC’s argument that Mr. Garlinghouse was “present at the Meeting” and therefore knows what was said there misses the point.

“The only participants in the meeting were Mr. Garlinghouse and representatives of the SEC. There is no other available evidence that could corroborate Mr. Garlinghouse’s recollection that he took comfort from the meeting with Commissioner Roisman. That, too, distinguishes the SBI Notes—as to which the SEC pointed to the availability of alternative evidence, namely, SBI’s recollection of the meeting”,

“The only distinction is that these are notes of a meeting with Mr. Garlinghouse, which makes them more relevant and potentially exculpatory not less, and heightens the justification for requiring their production.

“Finally, the SEC’s attempt to defend its sword-and-shield tactics is unconvincing. It is plain that the SEC viewed the “memorandum-to-file” of Mr. Garlinghouse’s 2018 meeting with Chair Clayton as helpful to its case so it produced it. With the Estabrook Notes—also a record of a contemporaneous meeting between a Commissioner and Mr. Garlinghouse—the SEC has evidently concluded the document does not support its case and so it is withholding it. The SEC should not be permitted to engage in such tactics.

“Whatever the judge rules, the SEC is already dead in the water”

Jeremy Hogan, Partner at the Hogan & Hogan law firm, commented on the filing and concluded that even if the SEC wins this motion, it won’t be able to deny what actually took place in the meeting.

“Let’s step back from the motion and think like a trial lawyer. At trial, Garlinghouse testifies about the meeting with Roisman. There’s absolutely no indication that Roisman or Eastbrook are disputing what was said (otherwise the SEC would gladly produce the notes).

“If Roisman or Eastbrook go turncoat, they could testify that Garlinghouse lied about his testimony… and what happens then? That’s right, Ripple gets to impeach the heck out of them with the EASTBROOK NOTES, which lose DPP privilege the moment they talk about the meeting.”

“Which means that the SEC has no evidence at all about the meeting but can only argue that Garlinghouse’s testimony is “self serving” and… all testimony is self serving. That’s very x2 weak sauce. By which I mean to say, whatever the Judge rules, the SEC is already dead [in the water]”.

“The SEC is dead on the fact that Garlinghouse left that meeting feeling that he and Ripple weren’t doing anything wrong. That’s of course only part of the battle here”.

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