Ripple has filed an opposition to the SEC’s motion to compel certain post-complaint discovery.
Famous crypto payments company Ripple has filed an opposition to the SEC’s motion to compel.
SEC Requests Post-Complaint Documents
For context, the SEC v. Ripple lawsuit attracted investors’ interest on January 11 when the plaintiff filed a motion in a New York federal court, asking Judge Sarah Netburn to compel Ripple to produce its audited financial statements from 2022 to 2023 and contracts governing the firm’s post-complaint sales of XRP to institutional investors.
The SEC also wants Ripple to reveal how much proceeds it made from institutional sales since the complaint was filed in December 2020.
Notably, the SEC’s requests pertain to the ongoing remedies litigation to determine the potential penalty for Ripple’s violation of securities laws by selling XRP to institutional clients.
Although Ripple was initially required to respond to the motion on January 17, the crypto payments company asked for a two-day deadline extension in order to file a suitable response to the plaintiff’s requests.
Ripple Cites 2 Reasons Why SEC Request Should Be Denied
Interestingly, Ripple has finally filed its response, opposing the SEC’s motion to compel certain post-complaint discovery. As usual, the development was shared yesterday by seasoned crypto lawyer James K. Filan.
#XRPCommunity #SECGov v. #Ripple #XRP Ripple has filed its Response Opposing the SEC’s Motion to Compel.https://t.co/nICsqSxuXA
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) January 19, 2024
In a letter sent to US District Magistrate Sarah Netburn yesterday, Ripple cited two reasons why the judge should deny the SEC’s motion to compel.
Firstly, Ripple argued that the SEC’s post-complaint requests are untimely. It emphasized that the securities regulator had sufficient time to request the post-complaint documents and interrogatory during the fact discovery phase of the legal tussle.
Since the SEC failed to request the post-complaint discovery during the fact discovery, Ripple emphasized that the commission “lacks good cause to do so now.” Notably, the fact discovery phase of the SEC v. Ripple case ended on August 31, 2021.
Furthermore, Ripple argued that the parties have already litigated whether post-complaint discovery was proper during the fact discovery phase. The company claimed that at the time, the SEC gave the position that post-complaint discovery was completely irrelevant to the lawsuit.
“The SEC should not be permitted to reverse course now,” it added.
Secondly, Ripple argued that the SEC’s post-complaint requests are irrelevant. According to Ripple, the post-complaint information that the SEC seeks would not impact the court’s determination of the remedies litigation.
“As to the SEC’s interrogatory in particular, the SEC has used all of its interrogatories in the case and cannot unilaterally grant itself more,” Ripple added.
Judge Netburn Has the Final Say
Despite Ripple’s opposition, Magistrate Sarah Netburn will have the final say in determining whether she will grant the SEC’s requests.
There is no official date for the ruling. However, the judge is expected to decide on the matter before the conclusion of the remedies-related discovery, which is scheduled for February 12, 2024.
