Battle over Hinman emails continues

Alex Dovbnya

U.S. Securities and Exchange Commission Says It May Seek Additional Discovery If Ripple Decides To Put Into Additional Defenses

The US Securities and Exchange Commission has informed Magistrate Judge Sarah Netburn says it plans to oppose the court’s recent ruling on deliberative process privilege (DPP), asking for additional time. The agency said in its recent letter that it plans to put forward new claims about privileges.

On January 13, the court ruled that the SEC had to produce emails related to the controversial Ethereum speech by former high-profile official William Hinman, in which he stated that the second-largest cryptocurrency was not a security.

The plaintiff then filed a reconsideration request, but it was rejected by the judge earlier this week, in what some described as a big win for Ripple. The SEC is not happy with the decision.

The agency noted that the defendants are willing to initiate summary proceedings without a final ruling on the matter.

No extra discovery

The SEC does not plan to make any further discoveries in the Ripple case for the time being. At the same time, the letter says that both the plaintiff and individual defendants may request additional discovery in the future regarding the disgorgement solution.

In addition, Ripple’s attorneys have informed the SEC that the defendants reserve the right to make appropriate defenses in the future. The SEC may seek discovery related to such defense in order to identify it as adverse.

The SEC sued Ripple and its top executives in December 2020, alleging that the defendants illegally raised more than $1.3 billion using an unregistered security asset. The plaintiff is seeking restitution of ill-gotten gains.

In his motion to dismiss the lawsuit, Ripple co-founder Chris Larsen argued that the SEC’s claims for disgorgement and civil fines should be dismissed as time-barred. As reported by U.Today, in early March the court shot down the executive’s attempt to dismiss the lawsuit. The court argued that each specific transaction “constituted a separate violation of statute”. CEO Brad Garlinghouse’s motion to dismiss the lawsuit was also dismissed.

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