• 30 May, 2024
News

Pro-XRP Lawyer Bill Morgan Criticizes SEC’s Approach in Ripple Case

Pro XRP lawyer Bill Morgan recently criticized the SEC’s approach in the litigation against Ripple Labs, which questions XRP’s classification. Morgan remarked on the SEC’s justification of the Fox Declaration as “summary not expert evidence,” noting that Ripple acknowledges the accuracy of its financial summaries. However, he sharply critiqued the SEC’s stance on “pecuniary harm,” suggesting the argument lacks substance.

Morgan sarcastically described the SEC’s focus as akin to “complaining you made profits from a contract with Ripple but didn’t make as much profits as someone else.” The lawyer implied that the issue is minor compared to the SEC’s failure to protect investors from significant losses like those seen with FTX.

The SEC has filed an opposition to Ripple Labs’ motion to preclude Andrea Fox’s declaration, arguing that her statement, the “Fox Declaration,” is an admissible summary witness statement under Federal Rule of Evidence 1006. This declaration is used for calculations related to disgorgement, specifically calculating prejudgment interest on what the SEC terms as “ill-gotten gains.”

Source: James K. Filan on X

The document primarily includes information derived from Ripple’s own sources, such as audited financial statements and tax returns. The SEC emphasizes that the declaration utilizes basic arithmetic to clarify aspects of Ripple’s accounting for the court. It does not constitute an expert opinion that would necessitate special disclosure under the Federal Rules of Civil Procedure.

Moreover, the SEC insists that while Andrea Fox has professional qualifications as an accountant, the Fox Declaration does not leverage her specialized knowledge beyond straightforward arithmetic applied to Ripple’s financial data. The declaration summarizes large volumes of data, simplifying it for court understanding without issuing any material decisions on Ripple’s financial policies or giving views on accounting for revenues and expenditures.

The SEC also references a precedent where Judge Torres previously rejected Ripple’s identical objection in a case involving another SEC staff accountant’s declaration, suggesting that Ripple’s current objections should be similarly dismissed. The SEC’s filing clarifies that the Fox Declaration was properly disclosed and does not fall under the categories necessitating pretrial disclosure as expert testimony. The commission argues that Ripple should not be surprised or prejudiced by its submission.

Amidst this backdrop, the price of XRP has continued to drop over the past week. At the time of publication, the altcoin was trading at $0.5136, down 6%.

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