SEC v. Ripple: Judge aware of XRP Army’s investigative work – Atty Hogan
“Well, I’ll say it: I swear Judge Netburn is following some of the XRP people on Twitter or maybe even on Youtube. I didn’t think so before but now… I see you Judge Netburn”.
Yesterday’s hearing was a key development for the SEC v. Ripple lawsuit although Judge Sarah Netburn will only make her final ruling on the privilege issue after September 28.
The conference room was maxed out, as promised by the XRP holders, and the Judge was clearly looking for clarification as to the SEC’s arguments for deliberative process privilege (DPP) despite the Judge’s prior insistence that the agency’s internal documents were relevant for the fair notice defense, therefore they must be handed over.
The highlight of the hearing was the Judge’s exchange with the SEC counsel Jorge Tenreiro as to the objectiveness or subjectiveness of “recklessness”.
“Mr. Tenreiro, is recklessness a subjective or objective standard?”, she asked.
The direct question was met with much evasiveness. “You know it’s always a bad sign when asked a black and white question by the Judge you have to start with “judge let me just first start off by saying…”, attorney Jeremy Hogan commented in a video.
“But eventually even the SEC did have to admit that its an objective standard. And why is that so critical? Because if the standard was an objective standard – what did Brad Garlinghouse know about whether XRP was a security when he sold it – if that’s all that’s relevant – the SEC’s internal deliberations are 100% completely irrelevant”.
XRP Army to the rescue
Statements and videos regarding the SEC and its officials’ views from 2017 to 2020 on digital assets, ETH, and XRP, show that the agency was far from a consensus on what constitutes a security or not in the new asset class.
An example is a video uncovered by the XRP community featuring SEC’s Amy Starr and Coinbase’s Dorothy DeWitt (now at the CFTC) that we covered and transcribed here.
The Judge seemed to be aware of such recordings. “What if all the SEC Commissioners were out having lunch and talking about how they are all confused about XRP and other digital assets status as a security or not, that would be relevant”.
For Mr. Hogan, that was the highlight of the hearing. “Well, I’ll say it: I swear Judge Netburn is following some of the XRP people on Twitter or maybe even on Youtube. I didn’t think so before but now… I see you Judge Netburn”.
If underlying law was unclear even to the SEC…
“If the underlying law was unclear at the time even to the SEC, then the alleged violation could not have been so obvious that the Defendant must have been aware of it”, Ripple counsel Matt Solomon stated, citing to the Novak v. kasaks case.
According to Jeremy Hogan, the Judge agrees those documents are relevant, enough to overcome the SEC’s privilege argument. That is why she has ordered an in camera review.
This means the SEC will be providing “lightly” redacted copies of the “privileged” documents to Ripple and complete and unredacted copies of all documents to the Judge, so she can make a final ruling as to the privilege issue.
In the meantime, Ripple has filed a motion to compel the SEC to provide non-evasive answers in regard to how the Howie Test applies to XRP. The plaintiff has been evading the defendants’ inquiries on the matter, even contradicting past statements.
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