Seasoned lawyer James K. Filan has shared a fresh update regarding the ongoing SEC v. Ripple legal battle.
U.S. District Judge Analisa Torres has officially signed an order dismissing the Securities and Exchange Commission’s (SEC) case against Ripple executives Brad Garlinghouse and Chris Larsen.
The judge signed the order yesterday, October 23, 2023, emphasizing that the claims alleged by the SEC against Ripple execs have been dismissed in their entirety with prejudice and without cost.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: JUDGE TORRES SIGNS ORDER OFFICIALLY DISMISSING CASE AGAINST BRAD GARLINGHOUSE AND CHRIS LARSEN pic.twitter.com/TLXG51hSlP
— James K. Filan ???? (@FilanLaw) October 23, 2023
SEC Claims Against Ripple Execs
The development comes days after the SEC disclosed its intentions to drop the charges against Garlinghouse and Larsen. It bears mentioning that on December 22, 2020, the SEC filed aiding and abetting charges against the execs, alleging that the duo raised capital to finance Ripple via the offer and sale of XRP to institutional investors.
Furthermore, the SEC alleged that the individual defendants also conducted personal unregistered sales of XRP totaling approximately $600 million.
“The complaint alleges that the defendants failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws,” the SEC said.
Notably, the charges against Ripple execs were related to the company’s institutional sales of XRP. Recall that the SEC classified Ripple’s XRP sales into three categories: institutional, programmatic, and other distributions.
The regulator alleged that these transactions violated Section 5 of the United States securities laws. In a landmark ruling, Judge Torres found that Ripple only violated the law by selling XRP to institutional investors.
However, she ruled that programmatic sales and other distributions do not constitute an offer or sale of investment contracts.
No More Trial Against Ripple Execs
Since the SEC’s case against Ripple execs relates to institutional sales of XRP, which the judge found to be investment contracts, the court initially scheduled that part of the lawsuit for a trial by next year.
Interestingly, the trial will no longer be held since the SEC has dropped charges against Ripple execs.
Potential Next Move
Following the dismissal of the case against Ripple execs, the crypto community, especially legal analysts, has been speculating on the regulator’s next move.
Interestingly, the vast majority, including Attorney Fred Rispoli, speculate that a settlement is likely for the SEC. Per Rispoli, the parties are already negotiating how much Ripple needs to pay to settle the case.
Meanwhile, the SEC can also appeal after Judge Torres has issued the final judgment. As reported earlier, the SEC previously made efforts to file an immediate appeal, challenging the court’s July 13 summary judgment decision.
However, the court denied the SEC’s request to certify an interlocutory appeal, ordering the commission to wait until the final judgment.
Dropping the charges against Garlinghouse and Larsen allows the regulator to appeal sooner if it chooses to. However, it can only file an appeal after the court has entered the final judgment, which comes after the remedies stage.
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