Crypto legal expert Jeremy Hogan predicts the U.S. Securities and Exchange Commission (SEC) will not appeal the judge’s decision ordering the securities regulator to release contentious evidence in its lawsuit against blockchain-based payments company Ripple Labs.
Hogan, a Ripple proponent, tells his 232,400 Twitter followers that on September 29th, U.S. District Court Judge Analisa Torres overruled the SEC’s objections to turning over emails sent by William Hinman – the former SEC Corporation Finance Division Director.
However, the XRP-friendly lawyer highlights that Judge Torres did not specifically say when the SEC should turn over the evidence. In this case, Hogan says that the SEC has two months or more to comply.
“The deadline becomes when an appeal of the judge’s ruling is due. The court is lenient like this because once the documents are handed over, it can’t be ‘undone.’
So, that deadline is, basically, 60 days – maybe longer if they move for reconsideration which I doubt they’d do.”
The evidence in question include internal emails written by Hinman and largely related to a speech he made in 2018 where he stated Ethereum (ETH) was not a security.
Hogan says if the SEC appeals the ruling over the Hinman documents, it could lead to a lengthy legal process and he does not think the regulator has a good chance to win on appeal.
“IF the SEC appeals the ruling, it will take a long time to figure out – months. I personally don’t think the SEC will appeal because it risks adverse BINDING case authority by doing so. Bad facts = bad law. And these are bad facts. But others have different opinions on that.”
Hogan says even if the SEC appeals, he expects the case to advance over whether Ripple violated security laws (Section 5). Ripple argues XRP is not a security and also that they were not given fair notice by the SEC that it was violating any security laws.
Hogan says the Hinman documents only have a bearing on the Fair Notice Defense (FND) issue.
“I believe that Ripple will object to a ruling on the Fair Notice Defense issue because discovery is not complete. It wins that objection. So, even if the SEC appeals the email order, the Section 5 violation issue will continue forward and be fully briefed by Nov. 15th.
NO MATTER WHAT happens on the Hinman email issue, no matter the delay, the main issue will move forward to judgment. If Ripple wins on the Sec 5 violation, the FND becomes moot. IF Ripple loses on Section 5, it can still move for summary judgment on the Fair Notice Defense.”
The SEC sued Ripple in late 2020 under allegations that it issued XRP as an unregistered security.
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