Led by Gary Gensler, the United States Securities and Exchange Commission (SEC) has filed a letter of Supplemental Authority to the presiding judge to further support its pending motion for Summary Judgment in the longstanding XRP lawsuit filed months ago.
The SEC’s letter of Supplementary Authority submitted on Tuesday to Judge Analisa Torres seeks to convince the court to reject the Fair Notice Defense posed by the XRP lawsuit defendants — Ripple and two of its executives; Brad Garlinghouse and Chris Larsen.
SEC Highlights Why Ripple’s Summary Judgment Motion Should be Rejected
Ripple’s fair notice defense — which maintains that the SEC failed to provide the cross-border payment firm with fair notice of the disclosure obligations asserted in the complaint— is among the facts presented by the San Francisco-based crypto solutions company in court to contend that XRP is not a security as claimed by the SEC.
In the Tuesday letter, Judge Torres’ attention was first drawn to a previous case between the SEC and Commonwealth Equity Services where the defendant’s fair notice defense was bounced by the presiding court. Accordingly, the SEC expects Judge Torres to toe the same line of ruling for the Ripple case.
Notably, the United States securities agency highlighted that in the SEC v. Commonwealth Equity Services lawsuit, the District of Massachusetts court granted its motion for summary judgment, denying the defendant’s fair notice defense despite available information that the SEC knew the complaint in question for more than two decades.
To further state why the court should reject Ripple’s summary judgment motion, the United States securities agency submitted that the Howey Test and its likes gave Ripple sufficient fair notice regarding what securities and commodities are.
More so, the agency implied that Ripple violated negligence-based provisions of the Investment Advisers Act of 1940, citing the SEC v. Commonwealth Equity Services lawsuit.
In particular, Judge Torres was reminded by the SEC that no District Court has supported fair notice defenses against the agency. The Commonwealth case added to the “unbroken chain of district court decisions rejecting fair notice defenses on summary judgment,” part of the letter read.
XRP Lawsuit Summary Judgment
The end of the Ripple-SEC lawsuit which began in December 2020 is near while the tension regarding the final ruling remains high. While it is not certain when Judge Torres will issue a ruling, pro-XRP lawyer John Deaton and Ripple CEO Brad Garlinghoiuse expect the summary judgment to come this second quarter.
Equally, the presiding District Judge is yet to respond to the SEC’s letter of Supplementary Authority. On the other hand, Deaton stated why the SEC’s filed summary judgment motion will be denied by the court. As published, Attorney Jeremy Hogan told what the SEC would do if its summary judgment is denied.
Regarding the SEC’s move to sue Coinbase, the attorney representing thousands of XRP holders as amicus curiae in the ongoing XRP case said Coinbase will have a better fair notice defense than Ripple.
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