Attorney Deaton said Judge Torres’s SEC v. Ripple case ruling is very sound.
Attorney John Deaton, Managing Partner at the Deaton Law Firm, has reacted to Fox Business’ Senior Correspondent Charles Gasparino’s tweet regarding Judge Analisa Torres’ ruling in the SEC v. Ripple case.
Gasparino Shades XRP Army
In a tweet yesterday, Gasparino shared a link to one of Judge Torres’ rulings. New York Post reported in 2021 that Judge Torres dismissed the case against a reputed gang member “because the grand jury that indicted him was not subversive enough.”
While sharing the link, Gasparino said, “Let’s see some other rulings [of] the patron saint of the XRP army.” His tweet was part of efforts to troll the XRP community following Ripple’s victory against the SEC.
Recall that Judge Torres recently ruled that XRP is not a security while also declaring that Ripple’s programmatic XRP sales on digital exchanges do not also constitute securities.
However, many securities lawyers have faulted Judge Torres’ reasoning in the Ripple case, with many suggesting that a higher court will overturn her decision.
Gasparino made this known in his previous tweet, saying that all securities lawyers he has interviewed believe XRP victory will not stand on appeal.
Deaton Defends Judge Torres’ Ruling
Notably, Gasparino’s constant criticism of Judge Torres’ decision has continued to stir reactions from the XRP community. Interestingly, Attorney Deaton joined other XRP enthusiasts to defend her decision in the SEC v. Ripple lawsuit.
In a Twitter thread today, Attorney Deaton said Judge Torres’ decision on Ripple’s programmatic sales on exchanges is sound. According to the prominent lawyer, many first-time XRP purchasers acquired the coin without knowing Ripple.
FIRST ME – NOW 👩⚖️
I’ve been fighting tribalism and echo chamber politics for the last three years. In 2013 SEC Officials were calling #Bitcoin a security. Unfortunately for me and my family, I wasn’t aware of #Bitcoin in 2013. Where was @maxkeiser when I needed him the most? 😂 https://t.co/GAKa4JV37S
— John E Deaton (@JohnEDeaton1) July 24, 2023
Per Deaton, these people did not know that Ripple sold software to banks nor owned 50% of the total XRP supply.
He noted that the judge was correct in her decision on XRP secondary market sales because it is difficult for buyers to expect profit from a company they know nothing of its existence.
He explained that some first-time purchasers only acquired XRP because it was among the top three coins in the market, and it settles in 3-5 seconds compared to Bitcoin, which takes 10 minutes to an hour.
Deaton noted that thousands of XRP holders acquired the coin for non-investment purposes.
“Judge Torres’ decision was 100% the correct ruling, despite claims that her decision is inconsistent with policy considerations behind the 1934 Securities Act,” said Deaton.
Interestingly, Deaton shared a video of him predicting that Judge Torres will rule that XRP secondary market sales are not securities.
Judge Torres’ decision was 💯 the correct ruling, despite claims that her decision is inconsistent with policy considerations behind the 1934 Securities Act. Show me a Howey factor that considers the level of sophistication of the investors. You can’t.
I was confident. 👇 pic.twitter.com/PzHIuEMcmj
— John E Deaton (@JohnEDeaton1) July 24, 2023
Deaton Blasts Naysayers
Furthermore, Attorney Deaton slammed critics who predicted the Second Circuit would overturn Judge Torres’ decision, calling them sore losers.
The people predicting Judge Torres will get overturned appear to be sore losers. But now the attack seems to be on this Judge who did her job. I remember some XRP holders claiming they were worried or that she was “bought and paid for” simply because she was an Obama appointee.
— John E Deaton (@JohnEDeaton1) July 24, 2023
He noted that Judge Torres only did her job by applying Howey factors to the facts of the case.
“Nothing more, nothing less. Judge Torres did her job, and some people don’t like it. Too bad. The law won,” he said.
Judge Torres’ Decision Won’t Be Reversed
For critics speculating that Judge Torres’ decision will be overturned, Attorney Deaton provided an analysis of her record on appeal.
Historically, the Second Circuit has reviewed 29 of Judge Torres’ decisions throughout her career as a judge, Deaton said.
Six of the 29 cases were remanded – a situation where the cases were sent back to the judge for further action.
Attorney Deaton added that the SEC would need more than luck to have Judge Torres’ ruling reversed. He concluded that even if the SEC successfully appeals Judge Torres’ decision, she will still give a similar verdict on remand.
This time, Deaton said the decision would be based on the common enterprise factor of the Howey test.
Deaton has reiterated that the SEC does not stand a chance to reverse the judge’s ruling using the common enterprise factor. Per Deaton, the SEC failed to establish the common enterprise factor in the lawsuit.
