Ripple’s Response against Unexpected SEC Demands: A Challenge Worth Pursuing, but Can it Succeed?

In the ongoing legal battle between Ripple Labs Inc. and the U.S. Securities and Exchange Commission (SEC), a significant development occurred on January 19. Ripple responded to the SEC’s motion to compel, raising two key objections. Former federal prosecutor and defense lawyer, James K. Filan, took to Twitter to share insights into Ripple’s stance.

Ripple argues that the SEC’s requests are not only burdensome but untimely. The contention is that the SEC had ample opportunity during fact discovery to seek the information it currently demands. Reopening discovery at this stage, according to Ripple, is unjust and could unnecessarily prolong the legal proceedings.

Ripple firmly asserts that the SEC has not justified the relevance of the sought-after information to the court’s determination of remedies. Ripple questions how the requested information impacts the court’s decision on penalties.

Legal analyst WrathofKahneman highlighted Ripple’s objections, focusing on the untimeliness of the SEC’s requests and the questionable merit of their demands. He also delved into procedural issues, including the closure of fact discovery, potential unfairness, and the SEC exceeding allotted interrogatories.

Twitter users expressed varying sentiments regarding the drama. Some envisioned a wrestling-style showdown between Ripple CEO Brad Garlinghouse and SEC Chair Gary Gensler, with Ripple emerging victorious. Others focused on the procedural aspect, highlighting Ripple’s attempt to prevent the SEC from obtaining what they deemed irrelevant information.

The arguments presented by Ripple emphasize procedural fairness and question the necessity of the SEC’s information requests.

Ripple’s response opposing the SEC’s motion to compel can be found here.