Assets tied to fines, SEC says in Ripple’s financial controversy.
Judge Sarah Netburn of the Southern District Court of New York has accepted the latest installment in the battle of letters between Ripple Labs and the United States Securities and Exchange Commission (SEC). At issue are Ripple's financial and institutional sales contracts, which the SEC wants to see in hopes of giving weight to further enforcement action.
The SEC submitted a letter to Judge Netburn on January 11 asking for an order to compel Ripple to release financial statements for 2022 and 2023 and Ripple's institutional sales contracts since the agency filed its lawsuit in late 2020. Judge Annalisa Torres Institutional sales of XRP (XRP) meet Hawaii's test and finalize securities sales in July.
Ripple responded to the SEC's request in a Jan. 19 letter to Judge Netburn, stating that the discovery process ends in August 2021 and that its conduct since the filing of the lawsuit is irrelevant. Furthermore, his financial situation is also irrelevant as he does not want to argue that he is unable to pay fines.
4 days ago I told Judge Torres that the SEC needed to show Judge Torres that ordering access to the contract for the post contract sale could not lead to a mini-trial. This is an excerpt from the SEC response courtesy of @FilanLaw… pic.twitter.com/ZHTZDnG83u
— Bill Morgan (@Belisarius2020) January 24, 2024
Related: Ripple's legal chief unveils SEC's XRP settlement offer ahead of 2020 lawsuit
In a letter dated Jan. 23, the SEC said Ripple “does not even claim prejudice by filing recent financial statements” and cited a previous decision:
“When calculating the amount of punishment necessary to prevent immorality, the amount of wealth of the accused should be taken into account.”
⚖️Unloading the SEC's response to #Ripple⚖️ (#5 will be discussed!) The SEC wants 3 things: 1) Audited financial statements for '22 and '23 2) All post-complaint sales of #XRP 3) Institutional sales of XRP post-complaint Earnings 1/7https://t.co/A6Qoj7pruZ
— WrathofKahneman (@WKahneman) January 24, 2024
The letter continued that Judge Torres left open the possibility of further discovery actions. According to the SEC, Ripple's financial condition and post-complaint conduct under the Securities Act (probably 1933) “will specifically consider orders when the violation is ‘likely to occur' and help determine the likelihood of recurrence.” Violations. Additionally, due to the nature of the sale, post-complaint order fulfillment may affect the amount of the settlement.
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