Earlier this Thursday, Judge Analisa Torres of the U.S. District Court for the Southern District of New York rejected a joint motion filed by San Francisco-based blockchain firm Ripple and the SEC that was seeking an indicative ruling on their proposed settlement.
As reported by U.Today, the parties asked for the indicative ruling earlier this month in order to find out whether Judge Torres would approve the settlement if the U.S. Court of Appeals for the Second Circuit were to remand the case back to the district court.
The SEC has agreed to ask Judge Torres to lift the injunction that was imposed by her as part of the final judgment last August, making a very notable concession. Under the aforementioned settlement agreement, Ripple's penalty would also be reduced to just $50 million.
Judge Torres has stated that changing the final judgment would be "procedurally improper" since the SEC and Ripple failed to file the correct procedural motion.
However, fixing the above-mentioned mistake does not mean that Judge Torres will be open to softening the terms of the judgment. The parties would have to justify the necessity for such a move, which is a high bar to clear. Changing or vacating final judgments is usually possible only under exceptional circumstances, such as newly discovered evidence or fraud, since they are meant to be final, and Judge Torres is not obliged to modify the court order even after the parties reach a settlement.
"...the parties fail to address the heavy burden they must overcome to vacate the injunction and substantially reduce the Civil Penalty," the Torres ruling said.
Hence, the judge believes that there is no valid legal basis for vacating the August 2024 final judgment.
Vladislav Sopov
Dan Burgin