Key Highlights from Ripple's Latest Conference with SEC
Magistrate Judge Sarah Netburn that Ripple did rule on whether or not allowed Ripple is allowed to send memorandum of understanding (MoU) requests to foreign regulators to obtain information from the company's partners and overseas exchanges.
After taking everything into consideration, the judge will announce her verdict in the coming days.
The SEC stands its ground
Jorge Tenreiro, a senior trial attorney at the SEC, claimed that the MoU process was not compulsory, adding that the flow of securities and money doesn’t stop at a country’s borders:
Essentially, what they are asking is to exempt only the U.S. and the SEC from the multilateral process…As the court, the flow of securities and money doesn’t stop at a country’s borders. One of the most important tools in our arsenal is strong cooperation with our counterparts.
The SEC also doesn’t intend to disclose the content of its MOU requests given that this information is privileged.
As reported by U.Today, the agency is seeking to obtain information from 14 foreign exchanges to determine whether or not Ripple's announcement influenced the price of the XRP token. It is also going after five Ripple partners that utilize the company's On-Demand Liquidity (ODL) solution, which prompted the accusation of intimidation from the defendants.
Ripple claimed that the SEC was attempting to “to gain unfair advantage” of the defendants, adding that the agency doesn’t have “special discovery powers”:
That doesn’t sound like a voluntary request at all.
The company’s attorney claimed that the MoU process is compulsory, accusing the regulator of leveraging the “weight and power of the U.S. government.”
Michael Kellogg claims the SEC is engaging in discovery in secret “to get the data that it thinks will support its argument” while “skirting rules.”
Ripple’s defense insists that the SEC’s foreign discovery is outside of foreign court rules:
What the SEC is doing is totally outside federal court rules. We did not find out about this until an outside party told us the SEC was trying to get information from them. Had they known about this they could have followed rules from the court.
Kellogg says that the SEC should use the process of the Hague convention, which would be too slow for the regulator to follow through with its foreign discovery.
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