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SEC Wants to Prevent Ripple from Searching Its Staff's Personal Devices

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Wed, 04/21/2021 - 15:56
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Alex Dovbnya
The SEC is asking the court to limit "endless, burdensome and unnecessary" discovery in Ripple case
SEC Wants to Prevent Ripple from Searching Its Staff's Personal Devices
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The U.S. Securities and Exchange Commission is seeking a court order that would prevent distributed ledger company Ripple from obtaining its internal communications and searching the personal devices of commission staff.

As reported by U.Today, Magistrate Judge Sarah Netburn partially granted the defendants' motion to compel the production of documents related to Bitcoin and Ether on April 6.

However, the SEC now says that Ripple is making "new and broader" claims that go far beyond the court order, accusing the company of "discovery gamesmanship" and harassment:

The defendants' approach is part of a pattern of gamesmanship with respect to discovery and the following examples show that Defendants do not actually seek relevant evidence, but rather seek to harass the SEC, derail the case's focus away from its merits, and bog down the SEC with document review.

The regulatory watchdog is now asking the judge to issue another order that would limit the discovery process to the SEC's external documents.

Related
Wall Street Journal Editorial Board Slams SEC for Suing Ripple

Before Jay Clayton, there was Mary Jo White

Ripple appears to be laser-focused on getting back at former SEC chairman Jay Clayton, who left the agency right after bringing the enforcement action against the company.

The defendants are attempting to get access to Clayton's personal emails to bolster their "fair notice" defense that is built on the premise that it had not been warned about XRP's security status for years. In late March, they also served a subpoena to hedge fund One River Asset Management after it hired the former regulator as a crypto advisor.

Yet, the SEC points out that Ripple is not seeking the emails of Mary Jo White—who served as the chair of the SEC from 2013 to 2017—and her enforcement chief Andrew Ceresney. Both of them are now on the company's payroll:

But the relevant period for such a (meritless) defense dates back to at least 2013 when XRP began trading, and when two of Ripple's current lawyers were Chair of the SEC and Director of its Division of Enforcement. Defendants did not ask for their emails to be searched, even though the then-Chair of the SEC made public statements as to her own views on whether a digital asset is a security.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.