SEC Unlikely To Sue Ripple Founders
There is speculation that the SEC might involve Ripple Labs’ founders in their legal battle against the company. However, legal expert Fred Rispoli believes this is unlikely for several reasons.
– SEC never brought an action specifically against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen, despite accusing Ripple Labs of selling unregistered securities.
– SEC often sues top executives when filing a suit against a company, but Rispoli believes the threat of a lawsuit was a tactic to pressure Ripple into a settlement.
– Calling former SEC Chair Jay Clayton and former SEC Director William Hinman as witnesses could raise questions about the SEC’s credibility.
– Himman documents suggest questionable practices within the agency and potential corruption.
– Rispoli argues that the SEC has a weak case, as they would struggle to prove the executives’ recklessness in institutional sales and lack evidence to differentiate between domestic and international sales.
SEC Has A Weak Case
Rispoli argues that the SEC will have difficulty proving that Garlinghouse and Larsen were reckless in institutional sales, as they can defend these sales as programmatic. The SEC also lacks sufficient evidence to distinguish between domestic and international sales. Additionally, the recent reorganization of the SEC’s trial team suggests a lack of manpower to handle another lawsuit against Garlinghouse and Larsen. The SEC filed an interlocutory appeal after a ruling in favor of Ripple Labs, but Rispoli sees this as a desperate move without any bargaining chips left if the appeal is not approved.
Hot Take
It is unlikely that the SEC will sue Ripple Labs’ founders, Brad Garlinghouse and Chris Larsen. The threat of a lawsuit was likely a tactic to pressure Ripple into a settlement. Moreover, the SEC’s case is weak, with difficulties in proving recklessness and insufficient evidence to differentiate between sales. The recent reorganization of the SEC’s trial team suggests a lack of resources to handle another lawsuit. Overall, it seems that the SEC’s intentions may be more about the settlement than pursuing legal action against the founders.
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