Ripple Asks Court to Exclude SEC’s Expert Witness Report. Here’s the Significance

The legal battle between Ripple Labs and the United States Securities and Exchange Commission (SEC) is now in the concluding phase.

Ripple has filed a motion requesting that Magistrate Judge Sarah Netburn exclude expert materials belatedly submitted by the SEC, asserting that these materials were withheld during the critical discovery phase of the remedies litigation. This move has the potential to significantly impact the SEC’s arguments.

Missed Deadlines and Expert Designation

Ripple’s motion highlights how the SEC refused to present its supplemental expert report on disgorgement during the discovery phase. A crucial declaration by Andrea Fox, an SEC assistant chief accountant, was withheld.

Fox’s declaration, which offers an accounting analysis central to the remedies phase, was mandated during discovery by the court. Yet, the SEC waited until its opening remedies brief to submit this report, thereby denying Ripple the opportunity to adequately counter Fox’s arguments during discovery.

Ripple further alleges that the SEC’s designation of Fox as a “summary witness” rather than an “expert witness”, was a tactical maneuver aimed at circumventing disclosure obligations. They argue that the scope of Fox’s accounting analysis extends well beyond mere summarization, qualifying her as an expert witness whose opinions should have been revealed earlier.

SEC Response and Proposed Schedule

Unsurprisingly, the SEC opposes Ripple’s request for exclusion. During a conference addressing the motion, both parties presented a revised schedule to the court. The SEC would be granted five business days to file an official opposition to Ripple’s motion, followed by a three-day window for Ripple to file its reply.

Context and Implications

This latest development comes as Ripple prepares its formal opposition to the SEC’s opening remedies brief. Ripple has vigorously contested the scale of the SEC’s demands, arguing that any civil penalty should be capped at $10 million. The firm also questions the basis for the SEC’s request for disgorgement and additional sanctions.

The outcome of Ripple’s motion to exclude Fox’s testimony could have significant ramifications. If the motion is granted, it could weaken the SEC’s position on remedies. This, in turn, could influence the outcome of this landmark case, which has far-reaching implications for the entire cryptocurrency sector.

---

Follow us on Twitter, Facebook, Telegram, and Google News