SEC files motion to compel Ripple to hand over “hidden” recordings 

Rick Steves

“Ripple never informed the SEC that Ripple routinely recorded staff meetings until a key former Ripple employee testified to that in her deposition earlier this month”

The Securities and Exchange Commission has filed a motion to compel Ripple to produce relevant video and audio-taped recordings of specific meetings that took place among current and former Ripple executives and key employees.

“Despite the SEC’s request for relevant recordings in its very first document requests to Ripple in January 2021, Ripple never informed the SEC that Ripple routinely recorded staff meetings until a key former Ripple employee testified to that in her deposition earlier this month, as described in more detail below”, the plaintiff told the court.

“Upon learning of the recordings’ existence, the SEC has tried to obtain relevant recordings without the Court’s involvement, but those efforts have proven unsuccessful and the parties are now at an impasse”, said the motion shared by attorney James K. Filan on Twitter.

“Ripple has stated that it will only produce the recordings described on Exhibit A if the SEC forfeits its right to seek to obtain any relevant and responsive recordings that the SEC may later learn about, including from the September depositions of Individual Defendants Bradley Garlinghouse (“Garlinghouse”) and Christian A. Larsen (“Larsen”) or from any additional documents Ripple or the Individual Defendants produce in this litigation”, it further explained.

“Given that Ripple has not produced a single recording to date, Ripple should not be permitted to condition its compliance with its discovery obligations on the SEC’s forbearance of the right to seek documents that the SEC does not yet know of through no fault of its own”.

The motion has triggered reactions within the community observing the lawsuit, namely XRP-friendly attorney Jeremy Hogan, who pointed out that the motion is valid.

“Meaning that this is an issue that needs to be addressed by the court. But I can’t understand why we have a barrage of motions like this at the last hour. After a 3 year investigation, the SEC really never had any idea that certain meetings were recorded?”, he said.

The SEC filed the motion just ahead of today’s key hearing, where the Judge will finally rule on the privilege issues that have been dragging on since April.

The telephone conference is scheduled for today, August 31, at 12.00 pm EST. DIAL: USA 844.867.6163 INT 409.207.6969 Code 9453921 #

Unauthorized recordings will be investigated and anyone found to engage in such behaviors may be subject to criminal sanctions, Judge Sarah Netburn said in a letter.

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Major win for Ripple today?

The next hearing may result in a major win for Ripple, according to attorney Jeremy Hogan. If the SEC loses the privilege argument, the agency’s internal discussions over the nature of ETH and XRP will be exposed and will likely fuel Ripple’s fair notice defense.

Mr. Hogan has previously said that a win of the fair notice could “save the industry from the SEC“. The agency seems to be worried about that possibility as the plaintiff told the court such a win would “nullify the Howie test“.

Although today’s hearing will be critical for the rest of the lawsuit, fact discovery does not end on August 31. It has been extended as requested by both parties in order to accommodate the depositions of Brad Garlinghouse and Chris Larsen.

In its turn, Ripple has recently filed a motion to compel the SEC that aims to expose the agency’s policies governing digital assets and their employees’ trading of XRP, ETH, and BTC. The motion has put SEC employees under the spotlight.

 

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