Ripple Wins: U.S. SEC Denied Request to Financial Records Not Associated to XRP by Court
April 11, 2021 11:51 AM
It's another win for Ripple Labs and its executives just under one week in the legal battle against the U.S Securities and Exchange Commission 'SEC'.
The court rejected the request made by the U.S. SEC for personal financial records of Ripples CEO Brad Garlinghouse and co-founder Christain Larsen. stating that it is not convinced, the Court feels that the personal banking records as requested by the Securities and Exchange Commission won't reveal the violations as claimed by the regulators.
Brad Garlinghouse and Christian Larsen of Ripple Labs have been accused by the U.S SEC over the sale of XRP tokens. On Friday, Sarah Netburn the presiding Judge Signed an order that restricts the regulators from obtaining personal financial records of the defendants that are unassociated with the XRP sale.
According to the order which explains that "The Security and Exchange Commission 'SEC' has served the defendants with Request for Production as they seek their financial statements dated from eight years back till date." Adding that the regulators have also handed out warrants to several financial firms which the defendants have accounts, pursuing similar records."
However, the order notes Ripples CEO Brad Garlinghouse and co-founder Larsen's pursuit for a protective order to avoid their discovery assignment and to subdue the warrants served upon financial institutions at which they maintain accounts, which the Court approved.
According to Section 5 of the U.S Securities Act, which details that all issuers must register non-exempt securities with the Security and Exchange Commission (SEC).
The order stated that the court is not convinced about the personal banking statements if they could reveal what the commission claims they would.
Besides, Netburn asserted that the motion for a protective order by the individual defendants is granted because the court discovered that's the commission request for the individual defendant's personal financial statements, aside from those related to XRP transactions are irrelevant or not in line with the needs of the case.
The order means the SEC will have to withdraw its Request for production pursuing the individual personal financial statements and stop its third-party warrants seeking similar records.
However, if as discovery progress, the commission discovers proof that the Ripple executives have not been forthcoming with records of their XRP transactions, if such evidence is shown to the court the SEC can renew its application.