Legal Expert Identifies Errors in Ripple CEO Brad Garlinghouse and Chris Larsen’s Agreement
In the ongoing Ripple vs. SEC case, lawyer Fred Rispoli has criticized Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen for agreeing to drop only some of the charges brought against them by the U.S. Securities and Exchange Commission (SEC). Rispoli believes that the executives should have sought the dismissal of all the charges rather than opting for a partial settlement.
Rispoli Stance
Rispoli expressed concern over the decision to drop some of the claims without seeking a full trial on the “aiding and abetting” charges raised by the SEC. He argued that Ripple’s leaders were in a strong position to defend themselves, particularly against the “Institutional Sales” claim, which required evidence of recklessness. Rispoli stated that the SEC lacked compelling evidence to meet this burden, and a jury trial could have resulted in a unanimous verdict in favour of Garlinghouse and Larsen.
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Furthermore, Rispoli highlighted missed opportunities for key testimonies in the case, suggesting that potential witnesses, including former SEC chairman Jay Clayton and former co-director of the corporation finance division Bill Hinman, could have provided valuable insights into the SEC’s determinations regarding the classification of cryptocurrencies, specifically XRP.
Judge Torres Response
In response to the SEC’s attempts to appeal certain aspects of a 2023 judgment, Ripple Labs filed a cross-appeal. U.S. District Judge Analisa Torres had previously ruled that Ripple’s sales of XRP to retail investors were not securities sales, but the SEC is now appealing other parts of the decision, including institutional sales and the distribution of XRP for non-cash considerations.
Ripple Legal Chief Stance
Stuart Alderoty, Ripple’s legal chief, expressed optimism about the case, stating that he felt confident about Ripple’s position in the Second Circuit. Meanwhile, there has been controversy surrounding the SEC’s filing deadline for its appeal, with questions raised about the validity of the filing. Despite this, the SEC’s appeal does not challenge the part of the decision stating that XRP sales to retail investors through exchanges are not securities, leaving the court’s finding that XRP is not a security when sold to retail investors intact.
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