Ripple’s chief legal officer (CLO), Stuart Alderoty, has continued to criticize the Securities and Exchange Commission (SEC) and its chair, Gary Gensler.
In a recent tweet, Alderoty pointed out that the SEC is losing legal battles and being criticized by federal judges due to the commission’s shady behavior.
Furthermore, the Ripple CLO noted that the government’s internal auditor also rebuked the SEC, adding that the commission has continued to conceal information about its meeting with a felon.
Lastly, Alderoty aimed a direct jab at Gensler, describing him as the “insulate Col. Jesseup,” one of the lead characters in the movie “A Few Good Men.”
The SEC is losing in court; being criticized by Judges for shady behavior; being rebuked by the Gov’t’s internal auditor; hiding info about meetings with a felon; becoming irrelevant on the international stage. Gensler – admitting no fault – has become the insulate Col. Jessep. pic.twitter.com/vqjPPcifr8
— Stuart Alderoty (@s_alderoty) November 16, 2023
Ripple and Grayscale Judges Slam SEC
This is not the first time Alderoty has publicly criticized the Securities and Exchange Commission and its chair. Recall that the SEC charged Ripple in December 2020 with violating federal securities law via the sale of XRP, an asset it labeled an unregistered security.
Contrary to the SEC’s claim, the judge ruled that XRP in itself is not a security while also declaring that most of Ripple’s transactions did not violate the law.
Judge Analisa Torres, the judge overseeing the Ripple lawsuit, slammed the commission over its inconsistent theories in relation to its arguments.
Aside from the Ripple case, the SEC also suffered another major defeat against crypto asset manager Grayscale Investments over the company’s spot Bitcoin exchange-traded fund (ETF) application. In the ruling, the judge slammed the SEC for being arbitrary and capricious via its regulation method.
How Ripple Could Trim $770M Fine
Similarly, Alderoty recently drew attention to the SEC’s latest defeat in the Second Circuit, where the commission lost its case against Aaron Govil. According to many legal experts, the Govil ruling could impact the remedies phase of the SEC v. Ripple lawsuit.
The ruling suggests that penalties should only be awarded to victims who suffered economic losses. It bears mentioning that the Ripple case is in the remedies phase.
As reported earlier, the court issued the remedies scheduling order, indicating that the parties will complete all remedies-related discovery by February 12, 2024.
It is expected that the SEC will demand a fine of $770 million from Ripple for violating the law via its institutional sales of XRP. Notably, $770 million is the amount Ripple raised by selling XRP to institutional clients.
However, legal experts like John Deaton and Jeremy Hogan speculate that Ripple will trim the amount by excluding non-US sales and its legitimate business expenses.
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