The SEC Won’t Pursue Trial Against Ripple Executives Says Legal Expert

In a recent news report, Fred Rispoli, a legal expert representing Ripple Labs explained why he thinks the United States Security and Exchange Commission would likely not pursue the top executive of Ripple Labs with a trial appeal in the ongoing court case between the two entities.

While the euphoria of the recent victory that Judge Torres granted Ripple Labs in its lawsuit with the US SEC, stating that the XRP token issued by Ripple is not security continues, many crypto enthusiasts are still speculating whether the regulator is going to object to the ruling, filing an appeal to drag the executive of the firm soon or if the verdict would remain valid.

However, Fred Rispoli, one of the attorneys representing Ripple Labs in the case, recently expressed his opinion on why it is not likely for the SEC to appeal and drag Brad Garlinghouse and Chris Larsen, the CEO and Executive Chairman at Ripple Labs, respectively.

In his tweets, Rispoli stated that there are many reasons for his assertion. He stated that in 2020, the SEC alleged that Ripples Labs sold unregistered securities, claiming that Garlinghouse and Larsen orchestrated the whole scheme. However, he noted that despite the strong allegation, the commission has never filed a lawsuit against the two executives.

Lawyer Claimed SEC Would Not Appeal To Avoid Implications

From previous occurrences, it was established in the report that whenever the SEC files a lawsuit against a firm, it usually files a class action against the executives of the firm. For instance, when the agency charged the Bittrex exchange to court for selling unregistered securities, it also brought actions against William Shihara, the CEO of the exchange at the time.

On the contrary, Rispoli thinks that only tried to force Ripple Labs into a tight corner, pressurizing it to compromise its stands during the lawsuit by threatening to sue the two executives, not intending to sustain the threats.

Highlighting another reason, Fred Rispoli stated that the speculated appeal might not surface as the SEC is a wee that pursuing an appeal might lead to a situation where Jay Clayton and William Hinman, the former Director and former Chairman of the SEC, respectively, might be called to the witness box, which is a scenario that Rispoli believed the SEC would avoid to maintain its credibility.

Furthermore, the report suggested that the law expert was possibly referring to the Himman documents that pointed out the suspicious and questionable conduct of the SEC which suggested corruption in the regulator’s system. In addition, reports showed that it is a popular notion that Himman was possibly influenced by external parties when he ruled that the Ethereum token is a commodity and not a security.

Rispoli Siad The SEC Has Insufficient Evidence

In addition, Attorney Rispoli pointed out in his argument that it is most possible that the SEC would not file an appeal against Ripple Labs CEO and Executive Director because the regulator would find it challenging to prove any allegation they might bring up against the executive for the institutional sales they executed back in 2020.

This was because Ripple Labs defended itself by claiming that the institutional sales of XRP by its executives in 2020 were programmatic. Furthermore, Judge Torres who presided over the case ruled that the sales did not match the criteria of an investment contract, contrary to the SEC’s claims making it difficult for the commission to appeal. Additionally, Lawyer Risoli pointed out that in the lawsuit documents, the agency failed to provide sufficient proof to clearly tell apart domestic sales from international sales. Pointing out another reason, the law expert noted that the SEC recently reorganized its trial team suggesting that it lacks the needed manpower to file and nurse another case involving the two Ripple Labs executives.

Although the SEC’s appeal for interlocutory section was recently granted against Ripple Labs shortly after Judge Torres’ judgment, Rispoli however considered the move by the commission as a Hail Mary as he believed the SEC would have no bargaining power in the lawsuit anyway if the appeal was rejected.

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