The legal battle between the Securities and Exchange Commission (SEC) and Ripple Labs has taken another turn, as the judge in charge of the case, Magistrate Judge Sarah Netburn, denied the SEC’s plea for attorney-client privileged.
SEC’s Claim to Attorney-Client Privilege Denied
Last week, we reported that the SEC had filed an omnibus motion to exclude (or limit) expert testimony from the Hinman documents. The Ripple team acknowledged the motion, filing their own counter-motion in response.
On Tuesday, July 12th, Judge Sarah Netburn denied the motion to exclude the testimony. The document which the SEC attempted to hide contains a speech in which former SEC chief Bill Hinman suggested that Ether (ETH) was not a security.
SEC Called out for Its Hypocrisy
In addition to denying the motion, Judge Sarah Netburn called out the SEC’s hypocrisy in trying to hide the Hinman documents. An excerpt from the ruling reads:
"The hypocrisy in arguing to the Court, on the one hand, that the Speech is not relevant to the market's understanding of how or whether the SEC will regulate cryptocurrency, and on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his Speech suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law."
The ruling comes just hours after Ripple Labs hit out at the SEC for its antithetical move of attempting “to shield the identities and opinions of its experts from any public scrutiny.”
Ripple’s legal team also claims that the SEC’s plea was an abuse of the Protective Order in a flagrant attempt to prevent criticism of its experts from becoming public.
On the Flipside
- Crypto legal expert Jeremy Hogan remarks that the turn is a unique case due to the fact that it is the prosecutors who are trying to obscure information, rather than the defendants.
Why You Should Care
The Hinman document, which the SEC has attempted to keep under wraps, is being viewed as potentially pivotal evidence that could swing the lawsuit in Ripple’s favor.
Read more about the Hinman docs below:
Find out about Ripple’s potential post-lawsuit plans: