Ripple tries to stop SEC from getting its recordings

Rick Steves

Was XRP marketed and sold as an investment contract?

Ripple has filed a response in opposition to the SEC’s most threatening motion to date. The plaintiff wants the Judge to compel Ripple to search and produce video and audio-taped recordings of the firm’s meetings speaking on topics relevant to disputes in the lawsuit.

In its motion filed earlier this month, the SEC accused Ripple of having a flawed search methodology that excluded highly probative evidence, enumerated the flaws, and explained how important it is that the Defendants hand over said recordings.

“The recordings are the best, unadulterated evidence of Ripple’s and the Individual Defendants’ contemporaneous views, treatment, and marketing of XRP during the relevant time period. Indeed, the recordings Ripple has produced so far are highly probative of the key disputes in this case.”

The SEC wants to secure evidence that the individual defendants and key employees were aware that XRP could be considered a security as they marketed the digital asset as an investment contract. This is the agency’s strongest case against Ripple.

SEC’s boil-the-ocean demand is flatly incompatible with the Federal Rules

Ripple, on the other hand, stated the SEC’s motion should be denied and provided three reasons against producing the abovementioned recordings.

“First, the parties are now well past the fact discovery deadline and the SEC actually agreed to the search protocol that Ripple used to identify recordings. In fact, in its prior motion to compel recordings, the SEC informed the Court that future recording requests would only be made if the recordings were referenced in the forthcoming depositions of the Individual Defendants or in documents produced by Defendants after the end of fact discovery. The present motion ignores that prior representation and vastly exceeds this scope. The SEC should not be permitted at this late date to renege on its prior positions.

“Second, Ripple already undertook a comprehensive and reasonable search for recordings, and has therefore met its obligations”, said Ripple’s response submitted by attorney Andrew J. Ceresney.

“Third, there is no way to search for additional recordings beyond the reasonable search Ripple has already undertaken without reviewing each and every one of the more than 4,000 total recordings, many of which are more than one hour in length. The SEC’s boil-the-ocean demand is flatly incompatible with the Federal Rules, and given the massive amount of material already produced in discovery, the SEC’s request is disproportionate”.

SEC’s claim that recordings will prove XRP were sold as securities is “sheer conjecture”

As part of the third reason, Ripple also stated that the SEC’s claim that the unproduced recordings bear directly on “whether Ripple’s offers and sales of XRP are investment contracts and therefore securities under Howey” is sheer conjecture.

“Assuming arguendo that any unproduced recordings pertain to that issue— which is purely speculative —the SEC’s request remains “unreasonably cumulative or duplicative” of prior discovery concerning that topic”, the response continued, adding that Ripple has produced more than 170,000 documents and one million pages that hit on responsive search terms, including meeting agendas, slide deck presentations with detailed speaker notes, and summaries and discussions of the meetings.

Ripple still has the edge in the SEC v. Ripple lawsuit

The “cryptocurrency lawsuit of the century” has recently seen Ripple scoring a major win as Judge Sarah Netburn allowed the addition of two documents and an email chain to the upcoming in camera review.

The email chain concerns discussions with a third party whom Defendants understand received guidance from the SEC to analyze its digital asset under the framework set forth in Director William Hinman’s June 14, 2018 speech.

The Judge will be taking a look at the evidence which may indicate that the SEC was using Hinman’s speech as policy. This could be a strong blow to the agency’s credibility in the court after several months insisting that the speech was a “personal opinion”.

The Defendants have secured many items of evidence to support the Summary Judgment on Ripple’s fair notice defense. The SEC seems to rely on the accusation that XRP was sold and marketed as an investment contract, therefore a security according to the Howie Test.

There’s more on Ripple:

  1. Ripple scores major win as Judge finds out if SEC lied to court
  2. Ripple calls negligence as SEC seeks $1.38 billion from XRP lawsuit
  3. Ripple lawsuit raises hopes as ‘Crypto Mom’ condemns SEC policy
  4. SEC v. Ripple: XRP Holders score “huge win” with Amicus Curiae status
  5. SEC pushes back against Ripple’s “flawed search” of evidence on XRP
  6. Ripple running out of time as BIS ‘conspires’ to end cryptos’ threat to financial system
  7. SEC v. Ripple: XRP’s utility and currency value backed by former U.S. Treasurer
  8. Ripple pushes SEC up against the wall: “If personal opinions, then no privilege”
  9. Ripple buries SEC in paperwork in XRP lawsuit: Nearly 30,000 requests
  10. Ripple responds to Senator Toomey on XRP, the SEC, and how to do better

SEC v. Ripple: What’s next on the XRP lawsuit agenda?

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