Here’s what the SEC thinks about Ripple’s support for XRP Holders’ ‘limited participation’
In what is the latest salvo in the relentless legal battle between the United States SEC and Ripple Labs, the plaintiffs have now responded to the defendants’ reply to Attorney John Deaton and XRP Holders’ motion to intervene, a motion that was filed on the 19th of April, 2021.
In his motion to intervene, Deaton had argued that “XRP holders cannot rely on the defendants’ efforts in this case,” with his submission adding that intervention is necessary to “develop the court’s understanding” of XRP’s independent utility. In its own response, defendants Ripple Labs, while supporting the said motion, had argued in favor of the movants’ “limited participation” only.
This was one of the points taken issue with by the United States SEC in its latest submission, with the regulatory agency once again reiterating that precedent suggests that such interference with a government enforcement action would,
“… impermissibly intrude on Executive Branch prosecutorial discretion, while the doctrine of sovereign immunity and Section 21(g) of the Securities Exchange Act of 1934 bar any claims by Movants against the SEC.”
What’s more, the SEC also alleged that the movants have not demonstrated a cognizable interest in the case, with the agency, again, claiming that their interests will be adequately represented by the defendants.
As expected, both these contentions were opposed vehemently by XRP holders in their latest submission before the court, a submission which was in response to the SEC’s opposition to the motion to intervene.
The SEC also took issue with the defendants’ contention that the “movants can offer evidence on three key premises of this action.” These three premises, however, namely – XRP’s secondary market, the purported use of XRP, and the connection between Ripple’s efforts and success or failure of XRP – the agency claimed, have already been argued on by Ripple Labs.
“Movants cannot offer any unique perspective or information that is not already available to the Court.”
Further, the regulatory agency also asserted that the movants won’t be impartial, objective participants seeking to aid the court. According to the SEC, if the movants are allowed “limited participation” as amici curiae, they would not be “friends of the court.” Instead, the amici would be “friends of the defendants” since they have already adopted the litigation position of Ripple Labs.
The SEC’s opposition to such participation is also founded on the contention that the SEC would be “unduly prejudiced.” The aforementioned memorandum of law added,
“Movants cannot be allowed to present “evidentiary material” to the Court—which would impermissibly transform the nature of this case—but deny the SEC the right to discovery as to that purported evidence.”
The agency concluding by claiming that the movants shouldn’t be allowed to expand the issues in the case. Here, it’s worth noting that the same point was addressed by Deaton’s latest submission to the court, a submission in which he argued that the proposed intervention would not broaden the SEC’s claims since it would be well within the scope of the SEC’s amended complaint.