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SEC seeks access to recordings of Ripple’s internal staff meetings in an XRP lawsuit


www.thecoinrepublic.com 01 September 2021 17:32, UTC
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  • The Securities and Exchange Commission (SEC) of the United States has stated its intention to file a motion requiring Ripple to produce pertinent video and audio recordings of the meetings
  • The SEC has charged Ripple with failing to notify it of the existence of the recordings
  • Ripple also refused to clarify whether it had searched for and recorded responsive recordings, according to the SEC

The US Securities and Exchange Commission [SEC] has stated its intention to submit a motion to compel Ripple to produce relevant video and audio-taped recordings of meetings between current and former Ripple leaders and key employees in its most recent filing.

SEC has accused Ripple of not informing about the recordings

Despite the SEC’s request for relevant recordings in its very first document requests to Ripple in January 2021, Ripple never informed the SEC that Ripple routinely recorded staff meetings until a key former Ripple employee testified to that in her deposition earlier this month, the SEC has accused Ripple of not informing the agency about the existence of the said recordings.

The individual in question is Antoinette O’Gorman, Ripple’s top compliance officer, who stated that the company routinely filmed staff meetings during her August 4 deposition. The SEC further alleged that, despite the SEC’s request in January, Ripple refused to clarify whether it had searched for and recorded appropriate recordings.

Furthermore, in order to reduce its workload, the SEC had restricted the kinds of recorded meetings to which it desired access. The SEC also attempted to obtain the tapes without the intervention of the court, but to no avail, according to the report. Ripple has been accused of failing to produce or reveal the existence of these tapes despite being asked to do so when the investigation began.

Ripple agreed to hand over the recordings to SEC under certain conditions

Ripple has agreed to hand over the recordings requested by the SEC, but only under certain conditions. To begin with, the company hopes that this will put an end to the parties’ discovery-related arguments over Ripple’s recordings. More intriguingly, it wants the SEC to relinquish its authority to demand the production of any new recordings it discovers in the future. The impending depositions of Ripple’s top executives, including CEO Bradley Garlinghouse and co-founder Chris Larsen, fall into this category.

Given that Ripple has yet to produce a single recording, the SEC responded in its filing that Ripple should not be allowed to condition its compliance with its discovery obligations on the SEC’s forbearance of the right to seek documents that the SEC does not yet know about due to no fault of its own.

The panel also explained why it was necessary to keep trying to obtain the tapes. They are most likely non-privileged papers that would support the SEC’s charges against Ripple, according to the report. It went on to say that, the recordings reflect Ripple’s efforts to boost or sustain the price of XRP, as well as to instill profit expectations in potential XRP buyers, both of which are essential under Howey to show whether XRP was offered and sold as a security.

This filing was made barely one day before the deadline for fact discovery. Despite Ripple’s refusal to comply with the SEC’s inquiries, the agency has been proceeding in a similar manner. Ripple filed a motion to compel the SEC to provide procedures and information about its employees trading in cryptos like Bitcoin, Ethereum, and XRP only last week. Even though the SEC has until September 3rd to reply to this motion, considering its track record, it may as well decline.

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