Ripple Labs Challenges SEC’s Last-Minute Expert Submission in Ripple vs. SEC Lawsuit

Ripple Labs Inc. has made a significant legal move by filing a motion to reject the new expert materials submitted by the Securities and Exchange Commission (SEC) in the ongoing court case that has attracted a lot of attention from investors.
This latest development adds another layer of complexity to the high-profile case as Ripple challenges the timing and appropriateness of the SEC’s recent actions.
Ripple argues that the SEC’s introduction of a new expert declaration and accompanying exhibits after the agreed remedies discovery deadline is unfair. They claim that this declaration, prepared by Andrea Fox, was not disclosed during the designated discovery period and extends beyond mere summarization of data.
Andrea Fox, an Assistant Chief Accountant in the SEC’s Division of Enforcement, provided detailed accounting analyses to calculate the net profits Ripple allegedly gained from unauthorized securities sales of XRP. Ripple contends that Fox’s involvement goes beyond that of a summary witness and qualifies her as an expert witness, requiring earlier disclosure as per Federal Rule of Civil Procedure 26(a).
Ripple’s legal team cites Abraham v. Leigh as a precedent, emphasizing that Fox’s substantive accounting judgments without prior disclosure are the type of “sandbagging” that Rule 37(c)(1) aims to prevent.
The SEC categorizes Fox as a summary witness rather than a factual or expert witness. However, Ripple argues that her deep dive into financial records and the application of specialized accounting knowledge make her an expert witness, necessitating earlier disclosure.
Ripple’s filing highlights the procedural disadvantage caused by the SEC’s timing, which prevented them from thoroughly cross-examining Fox’s findings and presenting a rebuttal report.
Ripple asserts that the late disclosure should be struck to prevent prejudicial impacts on their defense and the integrity of the legal process.