Renowned XRP community legal expert Fred Rispoli has shed light on key factors that strongly suggest the SEC will not pursue a trial against Ripple's top executives, CEO Brad Garlinghouse and Executive Chairman Chris Larsen. Rispoli's insights provide compelling arguments that challenge the feasibility of the impending trial.
As a reminder, the original lawsuit, filed by the SEC in 2020, accused Ripple of securities violations and named Garlinghouse and Larsen as central figures in the alleged wrongdoing.
First, Rispoli suggests that the SEC's initial decision to implicate Garlinghouse and Larsen might have been strategically aimed at pressuring Ripple into a less advantageous settlement, rather than a strong intention to litigate. Second, he points out that the prospect of key SEC figures such as Hinman and Clayton facing rigorous questioning in a trial could potentially backfire, creating an unfavorable scenario for the regulatory body.
Yes, but SEC has to get permission from the Court to do so. It would be humiliating for the SEC to just "drop" the claim. I'm not sure it has humility, but I bet we can't find one instance of this happening previously under similar circumstances.— Fred Rispoli (@freddyriz) August 24, 2023
Third, Rispoli questions the SEC's ability to establish the executives' recklessness in terms of institutional sales, especially considering their potential defense in light of the legality of programmatic sales. He also raises doubts, fourth, about the strength of the regulator's argument regarding the differentiation between domestic and international sales, which could weaken the foundation of their case.
Fifth, Rispoli draws attention to the recent reorganization of the SEC's trial team, suggesting that this move might hint at a potential lack of readiness for a trial. He underlines that the SEC is juggling multiple trials, making the proposed trial against Ripple executives an uphill battle. Lastly, he underscores the significance of the regulator's choice to pursue an appeal. This strategic decision demonstrates the SEC's all-or-nothing approach, believes the expert.