Judge Rejects Ripple Executives’ Motions to Dismiss SEC Lawsuit
In a blow to the defendants, the court dismissed Brad Garlinghouse and Chris Larsen’s double motions to dismiss the SEC lawsuit
Analisa Torres, a judge for the United States District Court for the Southern District of New York, has denied The dual motions of Ripple CEO Brad Garlinghouse and co-founder Chris Larsen to dismiss the lawsuit filed against them by the US Securities and Exchange Commission in December 2020 dealt a blow to the individual defendants.
The motions were filed last April by Ripple’s two top executives.
The court finds that the agency has made plausible that Garlinghouse and Larsen recklessly ignored the facts “allegedly causing Ripple’s XRP to amount to the unregistered sale of securities.” The SEC also “proven plausibly” that the individual defendants made domestic offers of the token. In addition, the court rejected the claim that their sales were predominantly foreign.
In addition, the judge also refused the SEC’s motion to address Ripple’s make-it-or-break-it “fair notice” defense.
As reported by U.Today, the SEC filed the motion last April and later added several letters of additional authority to bolster it.
The court “will not conclude” that Ripple’s affirmative defense is invalid at this stage of the case.
The judge says the agency will not experience “undue bias” as a result of the defense’s continuation.
Stuart Alderoty, General Advisor to Ripple, has already replied over the decision to shoot down the SEC’s strike proposal, claiming there is a “serious question” as to whether the agency has given the company fair notice.
Garlinghouse also took to Twitter to describe the “fair notice” ruling as a “huge victory” for the defendants without commenting on his failed motion to drop the lawsuit.