A court rejected the SEC’s motion to prevent disclosure of internal documents in the Ripple case, with the regulator relying on the attorney‑client privilege.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: MAGISTRATE JUDGE NETBURN DENIES THE SEC’S ATTORNEY-CLIENT PRIVILEGE CLAIMS. “THE PREDOMINANT PURPOSE OF THE COMMUNICATIONS WAS NOT TO PROVIDE LEGAL ADVICE. THE DOCUMENTS MUST BE PRODUCED.”https://t.co/Ze5kCf1JKP
— James K. Filan 🇺🇸🇮🇪 105k (beware of imposters) (@FilanLaw) July 12, 2022
The discussion concerns Hinman’s 2018 remarks, in which he stated that Bitcoin and Ethereum were not securities, for various reasons.
The SEC argued that Hinman’s remarks reflected his personal views. In February the Commission filed a motion with the court, arguing that the former employee expressed the corporate-finance department’s position. In doing so the agency sought to extend the DPP to the drafts of the remarks.
In the order of July 12, Judge Netburn described the regulator’s stance as hypocritical. She noted that the Commission tried to distance itself from the remarks, even though the former employee “consulted with an SEC lawyer in drafting his speech”.
In the judge’s view, this suggested a desire by the agency to pursue its aims, rather than fidelity to the law.
According to lawyer Jeremy Hogan, the SEC has 14 days to appeal. If no appeal is filed or the ruling remains in its current form, the Commission will have to disclose the documents.
This was not even a nuanced opinion. Judge Netburn tore apart every SEC argument for attorney-client privilege of the Hinman emails.
That starts the 14 day clock for an appeal to Judge Torres. And if her recent Orders are any precedent, things will move relatively fast. https://t.co/7k6KJx4Lea
— Jeremy Hogan (@attorneyjeremy1) July 12, 2022
Gabriel Shapiro, chief counsel at Delphi Digital, called Netburn’s decision “a big tactical victory for Ripple”.
“hypocrisy” is the word of the day I guess…first in Twitter v Musk, now here, with the judge calling the SEC’s litigation tactics hypocritical re: Hinman speech
great job by Ripple’s lawyers in driving this point home to the court pic.twitter.com/vechK4UdPx
— _gabrielShapir0 (@lex_node) July 13, 2022
Earlier Fox Business published a sweeping investigation into the SEC’s case against Ripple. Journalists concluded that the officials behind the suit might have ties to Ethereum.
In August 2021, a potential conflict of interest in the actions of former high-ranking SEC officials was flagged by Empower Oversight, a nonprofit organization.
At the end of 2021, the Deaton Law Firm alleged that the SEC showed greater loyalty to Ethereum than to the XRP token.
As reported, Ripple’s chief executive Brad Garlinghouse had welcomed the progress of the litigation, suggesting a conclusion by the end of 2022.
Parker at the law firm Davis Polk and former SEC official Joseph Hall said the Commission faced high odds of losing the case on its merits. Yet he doubted a swift end to the proceedings.
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