The US Securities and Exchange Commission (SEC) has filed a Letter of Supplemental Authority to boost its Motion for Summary Judgment in its case against Ripple Labs. The SEC seeks to provide additional legal precedent that supports its motion for summary judgment in the lawsuit. The case was filed in 2019 and the SEC sued Commonwealth and CEO John Rooney for violating federal securities laws. It argues that Ripple’s “fair notice” argument is inapplicable and frames its case against Ripple.
On 7 April 2023, the District of Massachusetts court issued an opinion in the Commonwealth Equity Services LLC v SEC case giving the SEC its motion for summary judgment and rejecting the defendant’s cross-motion for summary judgment. The SEC cites the decision as support for its case against Ripple. The court also rejected a procedural defense that the SEC failed to provide the defendant with enough notice of the disclosure obligations alleged in the complaint. The SEC says the Commonwealth decision provides additional authority for rejecting Ripple’s fair notice defense and granting the SEC’s motion for summary judgment.
The XRP legal community does not see any influential arguments in the SEC’s new letter. Attorney Jeremy Hogan sees the central issue at the heart of the case as a technology issue. If Judge Torres understands technology and decentralization, a Ripple victory seems very likely. Australian lawyer Bill Morgan commented dismissively on the SEC’s new letter, denying any comparability. He argues that there is no factual similarity in selling an asset like XRP, which is 13 years old, to buyers to whom it has no post-sale obligations, and an investment adviser who failed to make all necessary disclosures and owed fiduciary duties to its retail investor clients.
Fred Rispoli, founder of Hodl Law, commented that the letter is not “super on point” but could cause a further delay in the ruling. Throughout the case, Judge Torres has always given the opposing party time to respond. Ripple could file its response in under two hours. At press time, the XRP price stood at $0.5084.
In conclusion, the SEC’s recent letter of supplemental authority adds additional legal precedent to support its case against Ripple Labs. The Commonwealth Equity Services LLC v SEC case provides authoritative evidence to support the SEC’s legal arguments against Ripple. However, it may take a competent judge of technology and decentralization to rule in Ripple’s favour.
