- On Friday’s hearing, Ripple revealed that it had already given the SEC access to two memos by its lawyers from 2012 and 2015.
- According to one attorney, Ripple looks set to win the battle on whether there was fair notice by the SEC regarding XRP’s status and this could collapse the regulator’s case.
The last time the U.S Securities and Exchange Commission faced off with Ripple in court, it walked out victorious. As CNF reported, the presiding judge ruled that the regulator can keep on using “intimidation tactics” in its pursuit of evidence against the company. In yesterday’s hearing, however, the tide shifted slightly. According to one attorney, Ripple is likely to win the fight to prove that the SEC didn’t give fair notice that XRP was a security, which would effectively nullify the watchdog’s case.
On Friday, the SEC squared off with Ripple once again at the Southern District of New York. As has been the norm in recent hearings, XRP holders had the opportunity to dial in and listen in on the proceedings of the court. As attorney Jeremy Hogan revealed in his latest YouTube video, the maximum 4,000 slots for the holders were filled.
PARTY TIMEEEEEEEEE!! #XRPCommunity #SecvsRipple #ListeningParty Thank you @FilanLaw ♥ 🙌 Thank you @janet_yellin for the heads up ♥
USA (844) 291-4185
INT (409) 207-6997
Code 4934010 #
May 21, 2 PM EST
Spots fill up FAST. Log on EARLY! pic.twitter.com/hl1egN5DrC
— Aᶤda (@aiiiida) May 12, 2021
Friday’s hearing was on whether Ripple had lost its right to lawyer-client privilege regarding the memos they shared between them. The SEC wanted access to these memos to prove that Ripple had been informed that XRP could be a security.
However, as Jeremy reveals, Ripple has already given the SEC access to some of the memos.
We learned today from the SEC’s oral argument that Ripple has already given the SEC two lawyer letters from 2012 and 2015 and that the 2012 letter says, “Be careful, this XRP thing could be considered a security.”
The fight over ‘fair notice’
The ‘fair notice’ defense by RIpple is of critical importance, Jeremy points out.
The hearing today was super important as the fair notice defense puts the SEC on trial, so to speak. A fair notice defense looks at what the SEC did or didn’t do and what effect that had on companies that it has jurisdiction over.
This is why for the SEC, laying its hands on the Ripple memos could make or break the case. If it can prove that Ripple’s lawyers had informed the company XRP could be a security, it would play down the fact that it failed to provide any guidance to Ripple.
The SEC is still trying to throw out the fair notice defense according to the attorney. This would be a big blow to Ripple and would give the SEC a leg up in the case. However, Judge Sarah Netburn has continued to push the SEC to prove that the lack of clarity affected its operations, not just Ripple’s. This, Jeremy points out, shows that “she has kind of bought into what the defense is all about.”
Seal Nulliah, yet another attorney with a deep interest in the case, concurs. He believes that the Ripple legal team had the judge making their arguments for them.
I think the #Ripple lawyers were smart enough to recognize that when the Judge is making YOUR arguments for YOU, you don’t have to overcomplicate your submissions. It was a good day😉
— Seal Nulliah (@AttorneySeal1) May 21, 2021
Ripple’s lawyer James Filan revealed on Twitter that the next faceoff is on May 25. On this day, Ripple will submit its response to the SEC’s motion for a discovery conference concerning privileged materials. Two days later on May 27 will be the defining date, however. On this day, the SEC will submit its reply to Ripple’s opposition brief on the regulator’s motion to strike the “lack of due process and fair notice” defense.