“The SEC sent an email to a third party telling them to analyze a digital asset using the factors in the Hinman speech; which speech was just his personal opinion”, attorney Jeremy Hogan said ironically.
The SEC has opposed Ripple’s request to add three documents to the upcoming in-camera review to be conducted by Judge Sarah Netburn.
The agency stated those documents are not responsive to the Court’s prior orders, and the SEC placed the documents on a privilege log only in an (apparently futile) attempt to avoid disputes.
The plaintiff added that said documents “reflect deliberations by SEC staff, and have therefore been redacted or withheld pursuant to the deliberative privilege process”, according to the letter.
The SEC said there is “no need for the Court to review the three additional documents”, but if it finds appropriate to “pierce the privilege” and orders an in camera review, “the SEC respectfully requests that it be afforded the opportunity to make a submission explaining its privilege assertions for each of these documents, just as the Court did for the documents the SEC has already submitted in camera.
The SEC seems to have tried to keep the documents hidden from Ripple, but the team of lawyers detected the descriptions from the belatedly produced privilege log, which suggests they may be highly relevant to this case.
The documents include an email chain “concerning discussions with a third party whom Defendants understand received guidance from the SEC to analyze its digital asset under the framework set forth in Director William Hinman’s June 14, 2018 speech”.
The Defense team led by Matthew C. Solomon argued that the documents, based on the descriptions provided by the SEC, appeared to be most relevant to the claims and defenses in this case.
“The third is an email chain concerning discussions with a third party whom Defendants understand received guidance from the SEC to analyze its digital asset under the framework set forth in Director William Hinman’s June 14, 2018 speech. Had this privilege log been provided before Defendants filed its motion on August 10, 2021, Defendants would have included all three documents in Appendix A.
“Indeed, if the SEC had provided this privilege log any time in advance of the August 31 hearing, Defendants would have asked the Court to include these three documents in its in camera inspection. Instead, Defendants had to ask the SEC voluntarily to include the documents in its September 14 submission to the Court. The SEC filed its brief (ECF No. 355) without responding to this request.
“The next day, the SEC indicated that it would not submit these documents for the Court’s in camera review “absent a specific directive from the Court.”
Judge Sarah Netburn will soon be conducting the in-camera review of the SEC’s privilege log. It is not clear who the ‘third party’ mentioned in the log’s description is, but any guidance based on the framework set forth by William Hinman’s 2018 speech should be relevant.
Firstly, the document could explicitly prove Hinman’s speech was not merely a personal opinion, but the SEC’s official policy. This has been a key issue in the lawsuit.
“The SEC sent an email to a third party telling them to analyze a digital asset using the factors in the Hinman speech; which speech was just his personal opinion”, attorney Jeremy Hogan said, pointing to the SEC’s contradictions in the lawsuit.
Secondly, the guidance provided to the ‘third party’ might also be relevant to show the SEC’s inconsistency in terms of regulatory clarity.
This can be used to support Ripple’s fair notice defense, which claims the SEC failed to explain the firm and the broad digital asset space that XRP could be considered a security.
In the meantime, Ripple has just gained a heavy weight backer as the SEC v. Ripple could determine the future of the digital asset space. Former U.S. Treasurer Rosie Rios has come forth in defense of Ripple’s XRP currency value and utility via a simple tweet.
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