In Latest Ripple Vs SEC Update, SEC Wants Court to Deny Ripple’s Motion to Strike

The SEC has filed a motion opposing the request from Ripple to strike Andrea Fox’s declaration.

According to an update shared by seasoned defense lawyer James K. Filan, the Securities and Exchange Commission (SEC) has filed its opposition to Ripple’s motion to strike. The SEC submitted the motion yesterday in accordance with the court’s recent scheduling order. 

Ripple Asks Court to Strike Fox Declaration 

Last week, Ripple filed a motion asking the court to disregard the testimony and supporting evidence submitted by the SEC in support of its opening remedies brief. The testimony was issued by top SEC accountant Andrea Fox, who provided an arithmetic report on Ripple’s financial records. 

At the time, Ripple characterized Fox as an expert witness, and not a summary witness as claimed by the SEC. As a result, the crypto payments company contended that the SEC should have tendered her declaration during the discovery phase of the remedies litigation. 

While the SEC claimed that Fox is a summary witness, Ripple argued that summary witnesses are not allowed to offer new information after the close of discovery. Hence, Ripple asked Magistrate Sarah Netburn to strike Andrea Fox’s expert materials. 

SEC Counters Ripple

In its latest filing, the SEC asked the court to deny Ripple’s request, emphasizing that the company mischaracterized Fox as an expert witness instead of a summary witness. 

As a summary witness, the regulatory agency argued that Fox did not issue her testimony based on specialized experience nor render any opinions in the report. According to the SEC, the report only streamlined the presentation of Ripple’s audited financial record to Judge Analisa Torres using basic arithmetic operations. 

Furthermore, the regulatory agency also noted that Fox only followed the instructions of its legal counsel and did not provide an opinion on whether institutional clients suffered pecuniary harm on their XRP purchase. 

Relevance of Both Arguments 

It is worth noting that the issue of whether Fox is a summary or expert witness is imperative to the case. The findings will determine whether or not the court would strike Fox’s declaration. 

If the court considers Fox an expert witness, it could rule against the SEC for not complying with discovery requirements and tendering the report during the discovery to enable Ripple respond or counter the argument. However, if declared a summary witness, it is up to the court to determine whether Fox offered new information, which could significantly affect the outcome of the remedies litigation. 

Meanwhile, Ripple will file its reply to the SEC’s opposition on May 2, 2024. This reply will address the points raised by the SEC in its opposition and present counterarguments. The company is expected to counter the SEC’s argument regarding Fox’s classification as an expert or summary witness, and whether she offered new information.