A prominent attorney Fred Rispoli, has shared his take on the recent Form C filing by the U.S. Securities and Exchange Commission (SEC) in its ongoing case against Ripple. Rispoli’s analysis brings some critical insights into the complexities of the appeal process.
Rispoli drew attention to the SEC’s revival of its charges against Ripple executives Brad Garlinghouse and Chris Larsen. The regulator dropped these charges in 2023 but has added them to the appeal, and Rispoli called out what he sees as an unusual omission by Ripple’s legal team.
Although many believed that the SEC had dropped all claims against them, Rispoli says this is not entirely the case. He notes, “SEC never stipulated to a dismissal of ALL claims against these two, just ‘Institutional Sales.’”
The SEC seems to be leaving the door open to pursue Garlinghouse and Larsen further, particularly programmatic sales. He notes that the language used in the stipulation of dismissal was not comprehensive, particularly concerning the charges against Garlinghouse and Larsen, and questioned why Ripple’s legal team did not include more definitive language in the stipulation for dismissal.
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The Appeal of the Summary Judgment
Rispoli also touches on the SEC’s potential appeal of the summary judgment. The scope of this appeal is still unclear, with the SEC leaving open the possibility of revisiting issues surrounding programmatic sales and other distributions.
More alarmingly, Rispoli hints that the SEC could go as far as challenging whether XRP is inherently an investment contract, making its sales unregistered securities offerings. He notes that the SEC’s intentions will only become clearer when the briefing is released, but there’s “no question the issues are at minimum what were raised in the request for an interlocutory appeal.”
However, not everyone believes the SEC will go after XRP’s security status, as Ripple Chief Legal Officer (CLO) Stuart Alderoty shared in a post that XRP’s non-security status remains the law of the land as the regulator did not challenge it directly.
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Will the SEC Try to Get More Money From Ripple?
A crucial point Rispoli raises is the absence of specific references to the final judgment regarding disgorgement and the amount of the civil penalty in the issues outlined by the SEC.
While the final judgment is mentioned in the notice of appeal, Rispoli suggests that the SEC’s omission of the $125 million penalty and the absence of disgorgement might be an error.
He speculated that the SEC might bring these issues up because of the prior reference to the final judgment, but it remains to be seen whether it will address this gap in its briefing.
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