The US Securities and Exchange Commission (SEC) believes that it is not required to provide Ripple with internal documents.
The SEC continues to challenge a lawsuit against Ripple that requires the SEC to disclose internal email communications between department employees since 2018.
The new SEC letter states: “Judge Torres ruled that the SEC need not prove that individual defendants knew or recklessly ignored that Ripple’s offerings and XRP sales violated Section 5 of the Securities Act of 1933… Secondly, Judge Torres dismissed the argument about what the SEC needs to show: Staff knew and recklessly ignored indications that Ripple’s actions were possibly wrong.
SEC claimsthat Judge Torres’ decision makes it clear that internal correspondence is irrelevant to the proceedings.
“In light of Judge Torres’ order, it is clear that internal SEC filings reflecting the views of its employees on XRP, bitcoin, ether, or any other digital asset are not relevant to the investigation of the activities of individual defendants. Non-public SEC filings cannot shed light on whether individual defendants knew or knowingly ignored facts indicative of Ripple’s alleged violations.”
Attorney John E Deaton representing XRP holders in litigation named the latest SEC petition is “the largest in the case.”
The proceedings began with the SEC lawsuit against Ripple in December 2020. The lawsuit alleged that the company sold XRP as an unregistered security. The regulator adheres to this position to this day. In addition, the commission filed individual charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen.
During the trial, federal judge Sarah Netburn ordered the SEC to turn over drafts and emails relating to a speech by former SEC corporate finance director William Hinman. In 2018, Hinman stated that ether is not a security. Ripple claims from the outset that the SEC did not notify the company that it considers XRP a security.
In the course of the proceedings, Judge Analisa Torres denied the regulator’s request to ban Ripple from using the right to receive internal correspondence. However, the judge also rejected the proposal of Garlinghouse and Larsen to drop individual SEC charges against them. The SEC contends that Torres’ firing of Garlinghouse and Larsen’s offer gives them additional leeway not to release the Hinman documents.
Source: Bits
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