Judge Approves Investment Banker as Declarant in SEC vs. Ripple Legal Battle – Here's the Latest
In the latest development of the legal case between the United States Securities and Exchange Commission and Ripple Labs, Judge Analisa Torres has approved the participation of an investment banker declarant, Andrew A. Kunsak.
As stated in the court filings, US Southern District Court Judge Torres's authorization of Andrew A. Kunsak, from Sidley Austin LLP, to act as an investment banker declarant in the US SEC v. Ripple Labs lawsuit is to prevent the disclosure of court-sealed sensitive information.
"Andrew A. Kunsak of Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019, a member of this Court in good standing, hereby respectfully enters an appearance for Investment Banker Declarant in the above-captioned action."
Ripple had objected to a similar instance involving an investment banker declarant from the law firm supporting the SEC's stance. This recent development has raised significant worries for the defendants.
With the introduction of the investment banking declarant, the court seeks to tackle problems linked to orders that denied the SEC's wish to seal the Hinman speech documents and Ripple's request to safeguard confidential information about its executives' finances.
SEC's Interlocutory Appeal Follows Partial Win for Ripple and Crypto Industry in XRP Court Battle
On May 16, the US securities regulator's bid to keep internal discussion records from a speech by former director William Hinman under wraps was turned down.
In his June 2018 speech, Hinman, the former head of the Securities and Exchange Commission's corporation finance division, stated that Ethereum's native token, Ether (ETH), is not a security.
With the speech contradicting the SEC's motion in its case against Ripple, the SEC wanted to seal internal communications, texts, and expert reports post-Hinman's speech.
However, Judge Torres rejected the SEC's claim that sealing these documents is necessary to maintain transparency and openness within the SEC.
While the court ordered the Hinman Speech documents to be made public, it granted two other SEC requests: the removal of names and identifying details of SEC experts and XRP investor declarants, as well as personal and financial information of the defendants.
The documents were later revealed in June, including several emails linked to Hinman's 2018 speech. The emails show SEC officials discussing Hinman's speech, clearly expressing that Ether (ETH) was not a security. These documents reveal that Hinman followed his speech despite receiving contrary advice from other SEC divisions.
With the email used by Ripple to build a defense against the SEC lawsuit alleging the unlawful sale of XRP tokens as an unregistered security, Ripple had a win against the US Securities and Exchange Commission last month.
The US District Court of the Southern District of New York ruled that selling Ripple's XRP tokens on exchanges and through algorithms did not qualify as investment contracts. However, the court determined that these tokens' institutional sale violated federal securities laws.
Following Judge Torres's ruling, the SEC filed a motion for an interlocutory appeal regarding Judge Analisa Torres' ruling that the programmatic sales of XRP do not qualify as securities under the Howey Test.
The SEC also seeks to halt the ongoing proceedings until the court addresses its concerns, such as sealing Hinman's document and using an investment banker, which has been approved.