Southern District Court of New York City alleges the US Securities and Exchange Commission of committing hypocrisy.
In a recent development, in SEC-Ripple lawsuit, Magistrate Judge Sarah Netburn has labelled SEC of acting as hypocrite. The remarks came about SEC’s behavior with regards to William Hinman’s 2018 speech.
Magistrate Judge denies the SEC’s attorney-client privilege claims in the #Ripple case, whilst calling out the SEC for their “hypocrisy.” pic.twitter.com/Ep4IriOP4E
— Watcher.Guru (@WatcherGuru) July 13, 2022
In June 2018, William Hinman, gave a speech at a conference. In his speech Hinman stated that Ethereum is not a security. After the SEC filed the lawsuit against Ripple, they were quick to point out Hinman’s remarks. Ripple argued that on what grounds Hinman did not consider Ethereum a security and how he differentes Ethereum with XRP.
To Ripple’s motion SEC initially responded by not owning Hinman’s opinion. As the agency told the court that Hinman’s remarks were his own and they do not represent the agency. But later, SEC took a U-turn as it sought DPP (Deliberative Privilege Process) for Hinman’s speech. After SEC was denied by the court, it then filed another motion asking the court to consider attorney-client principle of law. It is to be noted here that previously the SEC had continuously been trying to persuade the court that Hinman’s speech is not relevant to the lawsuit.
During the hearing Judge Sara Netburn stated that it is hypocrisy on SEC’s hands as on the one hand the agency is arguing that the speech is not relevant to the case on the other it is conceding ‘that Hinman sought and obtained legal advice from SEC counsel in drafting his Speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law’.
Now, such remarks coming from the judge
Netburn is of much significance. As they clearly show the SEC’s standing in the lawsuit. When initially the SEC had filed the lawsuit against Ripple many had thought that the firm was in hot waters. But later as the case proceeded it became pretty clear that Ripple is in the lead as the SEC is pushed to the corner by the defendant’s aggressive approach in the lawsuit.
We are now more than 18 months into the case. While in the meantime SEC has lost much of the ground, Ripple has performed unexpectedly well.
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