The court rejects the SEC's request to release the personal financial statements of Ripple executives Brad Garlinghouse and Chris Larsen.
According to attorney Jeremy Hogan, this may be a "good sign" that the judge will also drop the lawsuits against the company's executives.
Ripple has won another victory in a lawsuit with the US Securities and Exchange Commission (SEC). Judge Netburn yesterday rejected the SEC's request to release the personal financial statements of Brad Garlinghouse and Chris Larsen. The regulatory body claims the documents may be relevant to individual lawsuits against Ripple executives to " prove the sanity of individual defendants and their efforts to increase the value of XRP."
However, Justice of the Peace Sarah Netburn believes otherwise. In his explanation, Netburn writes that "the Securities and Exchange Commission's requests for individual defendants' personal financial statements, with the exception of those XRP transaction reports already promised, are irrelevant to the needs of the case and are not proportionate to them."
As Netburn explains, the party seeking disclosure bears the initial burden of proving that the disclosure is relevant. However, the SEC was unable to provide relevant evidence. Notably, the SEC has already obtained all trading records related to the sale and transfers of XRP by Garlinghouse and Larsen, as well as all financial statements related to the compensation they received from Ripple.
According to Netburn, personal bank records cannot support what the SEC alleges-individual violations of U.S. securities regulations. Moreover, the SEC also did not provide evidence of a cover-up of transactions by Ripple's bosses. Netburn stated:
The Securities and Exchange Commission has not provided any evidence that individual defendants had hidden transactions or that the documents submitted support the conclusion of hidden transactions. [ ... ] The Securities and Exchange Commission's belief that individual defendants ' bank records may contain evidence of a speculative transaction that may have occurred (and that individual defendants do not indicate XRP in their transaction records) is not a basis for ordering extensive disclosure of transaction information. personal financial accounts.
As a result of the decision, the SEC must withdraw its requests to provide individual defendants ' personal financial statements and subpoenas from third parties. However, if the SEC does find evidence that Garlinghouse and Larsen are hiding XRP transactions, the request may be reopened.
If, as the information is disclosed, the SEC finds evidence that individual defendants have failed to submit records of their XRP transactions, it may provide such evidence to the court and resume filing the application.
Consequences of the court's decision for Ripple
As always, lawyer Jeremy Hogan gave the assessment via Twitter. There, he wrote that the rejection of the motion is a "good sign" that the judge will also drop the lawsuits against Ripple's bosses. Moreover, Hogan also referred to a reasoning in which the judge demonstrated an above-average understanding of cryptocurrencies and blockchain technology. He concluded :
I recently suggested that the court would not grant Ripple's motion to open a case if it intends to dismiss the defense on the principle of proper notice notice. Conversely, I think Brad / Chris may take this as a good sign in regards to their motions to dismiss the lawsuits against them.
Also look at FN1. The judge AGAIN makes the remarks that the technical operational aspects of XRP are important to the case. This is what Ripple WANTS to take into account. The SEC wants to stay out of it – they want it to be about marketing and money only; but the judge says otherwise!