Potential SEC Appeal: Ripple CLO Says Only Less Than 10% of Appeals Lead to Reversal 

Stuart Alderoty, the CLO of Ripple, expresses confidence that the appellate court will not reverse Judge Analisa Torres’ ruling in the SEC case.

In a recent CryptoLaw interview, The CLO cited two major factors that make him believe the SEC will not win on appeal against Ripple. Alderoty references a statistical trend relating to the success rate of appeals in the U.S., specifically in the Second Circuit, where the Ripple case could go if appealed. 

Alderoty suggested that less than 10% of appeals in the Second Circuit result in reversal. 

“Statistically, the courts of appeal, particularly the Second Circuit where this case [SEC v. Ripple] could go, reverses lower courts less than 10% of the time,” Alderoty remarked. 

The Ripple CLO cited the statistics to indicate the difficulty in overturning lower courts’ decisions in the Second Circuit. 

Additionally, Alderoty said Judge Torres’ careful treatment of all the issues in the case led Ripple to believe that any potential appeal from the SEC would likely be unsuccessful. 

SEC v. Ripple Final Verdict 

Alderoty’s statement comes less than two weeks after Judge Analisa Torres issued the highly anticipated final judgment. It bears mentioning that the verdict ended in a stalemate for the parties. 

As reported earlier, she imposed a fine of $125 million against Ripple instead of the SEC’s proposed $2 billion penalty. In this decision, the judge denied the SEC’s request for disgorgement and prejudgment interest. 

On the other hand, she issued a permanent injunction prohibiting Ripple’s future sales of XRP to institutions. Consequently, Judge Torres ordered Ripple to obtain a registration statement before selling any securities to U.S. institutions. 

SEC Might Appeal 

Following the ruling, top legal experts speculated that the parties, especially the SEC, might appeal. Popular legal expert James Murphy, a.k.a. MetaLawMan, highlighted disgorgement concerns and programmatic sales ruling as possible reasons for the SEC appeal. 

He speculated that Judge Torres’ ruling on programmatic sales and disgorgement could impact other SEC-related cases. Hence, the regulator might move to reverse these decisions on appeal. 

Alderoty Hopes SEC Doesn’t Appeal 

Meanwhile, Ripple’s CLO said that although he would not be surprised if the SEC appeals, he hopes the commission will not. According to him, the Ripple lawsuit, which has zero evidence of fraud or harm to XRP buyers, does not advance the SEC’s core mission of protecting the market and investors. 

Nonetheless, he believes both the Second Circuit and Supreme Court will continue to reject the SEC’s attempt to expand the U.S. securities law through the case. 

In the meantime, he asserted that regardless of whether the SEC appeals, the law of the land is that XRP in itself and secondary market trading of the token are not securities.