US courts deny the SEC to view records related to Ripple’s recent XRP transactions
The discovery phase of the lawsuit against Ripple Labs continues as Magistrate Judge Sarah Netburn denied, in part, the US Securities and Exchange Commission’s (SEC) request for additional discovery.
Ripple’s fair notice defense, which the SEC unsuccessfully moved to strike, is built around the US SEC actions and not its own conduct, since the company focuses on the Commission’s failure to give fair notice to the market about its position on whether XRP qualified as security.
The Court denied the requested access to the documents related to Ripple’s XRP transactions that post-date the lawsuit filing in December last year, still leaving room for the SEC to renew the motion.
“If, after the parties have exchanged expert reports, it becomes clear that Ripple’s expert relied upon documents that, in fairness, requires the SEC to review post-complaint documents, the SEC may renew its application.”
Besides the documents related to Ripple’s XRP transactions the court also denied the SEC’s request for documents related to Ripple’s lobbying efforts.
“Ripple’s lobbying efforts regarding the status of XRP are not relevant, and any relevancy argument is outweighed by the burden of production,” argued the judge.
In addition, the court denied the SEC’s request for a sixth deposition as “unripe”, which was motioned to “cover any gaps in knowledge” that depositions from other witnesses might leave in the SEC discovery.
For their sixth deposition, the SEC requested to depose a Ripple “representative pursuant to Rule 30(b)(6).”
This might have been a powerful tool for the Commission, since that witness would be authorized to speak for the company, unlike other employees deposed in the litigation.
Finally, the appointed judge also denied the SEC’s request to order Ripple to search the records of its General Counsels and Deputy General Counsel on the account of them being “highly burdensome.”
However, part of the SEC’s motion was approved as the court granted the Commission the right to conduct five additional depositions, including former Ripple employees Ron Will, Ethan Beard, Phil Rapoport, and Ryan Zagone as well as Christian Gil, co-founder of crypto trading firm and liquidity provider GSR.
In addition, the appointed judge ordered Ripple to search for responsive documents from the company’s former head of regulatory affairs, Ryan Zagone, and the company’s head of finance, Cameron Kinloch.Source