Home > Blog > Ripple Labs Pushes Back At SEC For “Protecting” Experts

Ripple Labs Pushes Back At SEC For “Protecting” Experts

U.S. Securities and Exchange Commission (SEC) made an unprecedented move to keep the names of its expert witnesses hidden in the case of cryptocurrency XRP. Both parties are scheduled to file their Daubert motions on July 12, 2022. We request that we be briefed immediately on the extreme position taken by the U.S. Securities and Exchange Commission (“SEC”), which holds that the names of its experts and any criticisms of their reports should be secret.

According to the SEC, Ripple and its former and current executives have been illegally issuing $1.3 billion in unregistered securities through XRP, which was created by Ripple’s founders in 2012.

Now, Ripple slammed the SEC in its reply to Ripple.

Ripple noted the SEC’s attempt to suppress public criticism of its experts’ opinions is particularly egregious in light of the fact that none of the SEC’s expert reports contains any confidential information.

The only information withheld in the expert reports is internal information about
Ripple, and even third parties. Protective Order (D.E. 53) is being abused by the SEC
to keep the public from knowing about the criticism of its experts. Just one example from the SEC:
an expert report is based on a review of publicly available open-source code and there is no conceivable confidentiality. The SEC is, however, interpreting the Protective Order as banning the defendants from publicizing their testimony from this expert, his report, or his name on July 12.

Now Ripple also requested a schedule in order to resolve the following issues:

July 12 Daubert motions and exhibits (with the limited sealing as to Expert 5) are
filed under seal.

July 18 Parties identify to each other any Daubert material that they contend
should be redacted and filed under seal.

July 20 Parties meet and confer on proposed redactions.

July 22 Parties seeking redactions that have not been agreed to file motion(s) to
seal with the Court.

July 25 Parties file oppositions to redactions that have not been agreed to.

District Court, S.D. New York. (2022, July 10). Seal – #527 in securities and Exchange Commission v. Ripple Labs Inc. (S.D.N.Y., 1:20-cv-10832). CourtListener. Retrieved July 11, 2022, from https://www.courtlistener.com/docket/19857399/527/securities-and-exchange-commission-v-ripple-labs-inc/

The defendants asserted in Sunday’s document that the SEC is abusing an order safeguarding information in the case to stop criticism of its experts from going public.

The SEC’s attempt to shield the identities and opinions of its experts from public scrutiny is unprecedented and unsupported by evidence, according to Ripple’s attorneys.

Torres was asked to let both sides make arguments and then decide whether any information should be shielded.

On July 11, 2022 — there was another big piece of news.

Judge Torres made a number of moves — both granting and denying some of the parties’ motions.

Here’s the rundown.

For the foregoing reasons, the parties’ motions are GRANTED in part, and DENIED in part.

Specifically,

1) The SEC’s request to redact language in the SEC Letter is GRANTED, and Defendants’

request to redact the citation to Exhibit O in the SEC Letter is DENIED.

2) The SEC’s request to redact language in the Defendants’ Letter, with the exception of the

redaction of footnote one, is GRANTED. The SEC’s request to redact footnote one is

DENIED.

3) The SEC’s request to seal Exhibits D, E, F, G, and P to the SEC Letter and redact Exhibit

B to the SEC Letter and Exhibit 1 to the Defendants’ Letter is GRANTED. The SEC’s

request to seal Exhibits C, H, L, M, N, and Q to the SEC Letter is DENIED. Defendants’

request to seal Exhibit O to the SEC Letter is DENIED. By July 15, 2022, the parties may

propose narrowly tailored redactions to Exhibits C, H, L, M, N, O, and Q, along with an

explanation justifying their redactions.

Torres, A. (2022, July 11). Order on motion to seal and order on motion to seal – #529 in Securities and Exchange Commission v. Ripple Labs Inc. (S.D.N.Y., 1:20-cv-10832). CourtListener. Retrieved July 11, 2022, from https://www.courtlistener.com/docket/19857399/529/securities-and-exchange-commission-v-ripple-labs-inc/

If you want to catch up on the Ripple XRP lawsuit case, you can read all of the major recent updates here.

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