XRP Lawsuit: Is the SEC worried about what Hinman’s deposition might reveal?
The last few weeks in the SEC v. Ripple Labs lawsuit saw the latter make its intention to depose a former SEC official, William Hinman, clear to the world. Now, although the SEC was swift to file a motion to quash the said deposition, it has now followed up the same with another reply in support of the said motion.
As per the SEC’s latest reply to the same, defendant Ripple Labs’ opposition letter began with an “incorrect premise” that the SEC must show why a subpoena should be quashed. It added,
“I fact, it is Defendants who bear the heavy burden of demonstrating“exceptional circumstances” sufficient to justify such a deposition under United States v. Morgan, 313 U.S. 409, 422 (1941) and Lederman v. N.Y. City Dept. of Parks & Recreation, 731 F.3d 199, 203 (2d Cir. 2013).”
According to the agency, Ripple failed to demonstrate that Hinman had “unique first-hand knowledge” of offers and sales of XRP as it had previously stated. It added,
“The only topic on which Defendants even claim (incorrectly) that Director Hinman has “unique first-hand knowledge” is “the circumstances under which he prepared and gave his [Ether] speech and the agency’s treatment of the speech after the fact”
Such a line of inquiry, even if allowed, will require the SEC to delve into non-public, internal deliberations that are protected by the deliberative process and other privileges.
The agency went on to double down on its position, asking Ripple to produce an instance where the deposition of an SEC official of Director Hinman’s rank was allowed. Any such case has often been quashed by the courts, the SEC pointed out.
In fact, the latest reply also accused Ripple of trying to ask the Court to make new laws by ordering a deposition on a high-ranking officer to question him about “external meetings (about which they could depose other participants), and about internal SEC deliberations that are privileged.”
“Director Hinman should not have to endure a lengthy deposition, dominated by the SEC’s assertions of privilege before Defendants challenge the SEC’s privilege assertions before the Court.The SEC’s motion to strike Ripple’s fair notice defense (D.E.128) is pending and may render the deposition of Director Hinman irrelevant.”
It’s worth noting here that in an earlier motion, the SEC had concluded that such a deposition will be a “waste of time.” However, the argument may fall in the court of law and we might have to wait for the Court’s decision.
Needless to say, reactions were swift and vocal, with attorney Jeremy Hogan putting plainly what the SEC’s argument in its latest letter is,
The SEC is presupposing what Hinman's testimony will be and basing its argument on such. "He will testify X,Y,Z and we will object and it will be a waste of time." If that argument works, why even take testimony? Trials could just be based on what the lawyers say will be said! https://t.co/Cz0UAM38yP— Jeremy Hogan (@attorneyjeremy1) July 9, 2021
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