By Nathan Ferguson
The United States Securities and Exchange Commission (SEC) has submitted a Letter of Supplemental Authority while further supporting the summary judgment-related motion in its case against Ripple Labs. While doing this, the US regulator pursues offering more legal precedent to back the motion that it filed to have a summary judgment.
SEC Files Unique Argument against Ripple in Its Lawsuit
On the 7th of April this year, a court from the District of Massachusetts released an opinion. This was regarding the lawsuit against Commonwealth Equity Services LLC approving the motion submitted by the SEC for summary judgment as well as refuting the cross-motion by the defendant for summary judgment.
As per the regulatory agency, the respective decision favours the case of the SEC against Ripple.
The case was submitted back in 2019 when the securities regulator of the United States sued Commonwealth as well as its chief executive officer named, John Rooney.
The allegations were dealing with the infringement of the federal securities laws via getting involved in misleading practices and sales, taking into account material misrepresentations. They were also related to the errors of interest conflicts. In the end, the SEC was the winner of the lawsuit.
Interestingly, the court denied a technical defence that the securities regulatory remained unsuccessful in offering the appropriate notice to the defendant regarding the disclosure responsibilities alleged in its complaint. As per the argument offered by the SEC, the “fair notice” argument of Ripple is equally inapplicable because it was a part of the lawsuit with the Commonwealth.
The SEC’s lawsuit against Commonwealth has something in common with Ripple as Commonwealth also claimed that the Supreme Court precedent dealing with disclosure obligations was fifty years old.
In this way, the organization asserted that it was not enough to suffice fair notice. Nonetheless, the court decided in support of the SEC. The court supported its decision by saying that the agency had given fair notice.
The watchdog stated in this respect that the Commonwealth decision offers additional authority to deny the fair notice defence of Ripple.
As per the regulatory agency, this could grant the motion filed by the agency for summary judgment. The legal community of Ripple does not witness any strong arguments among those mentioned in the letter.
In the words of the SEC, the Howey case, as well as the successors thereof, offered substantial fair notice for the invalidation of the constitutional defence of Ripple. It was recently reported that attorney Jeremy Hogan considers technology issues to be at the lawsuit’s centre.
If Judge Torres understands decentralization and technology, a win on the side of Ripple appears to be very likely.
The Ruling of the Ripple Lawsuit Could Shock the Entire Crypto Industry
The ruling of the respective case could be shocking for the whole crypto industry because it may form a precedent for the classification of digital assets. It can also determine how crypto assets are to be regulated within the jurisdiction of the United States. Simultaneously, attorney Bill Morgan rejected the exclusive letter issued by the securities regulatory agency’s defence.
He argued that there were no analogies between the two respective lawsuits. As mentioned by Hodl Law’s founder Fred Rispoli, throughout the whole lawsuit, Judge Torres has been giving time to the opposing party for their response to the other’s supplemental brief.
In his words, Ripple has the potential to submit a quick response to this filing. Nonetheless, he anticipates some delay.