Judge Torres Rules That SEC Cannot Seal Hinman Docs in Ripple Case

Sarah Wynn
Last updated: | 1 min read
Source: Pixabay

The US Securities and Exchange Commission cannot seal certain documents in connection with a 2018 speech from agency’s former director Bill Hinman in its case against Ripple, a judge ruled on Tuesday. 

The SEC wanted to seal entirely the “Hinman Speech documents” which have in them “nonpublic deliberations” among SEC officials in connection with that speech, said Judge Analisa Torres of the US District Court for the Southern District of New York.

In a now infamous speech, the SEC’s former Corporate Finance Director Bill Hinman  expressing his own views and not that of the SEC, said if a digital asset were to be “sufficiently decentralized,” they may no longer be a security — which could be beneficial to Ripple’s case.

The SEC had argued that the documents should be sealed due to the  “clear lack of relevance of these documents to the summary judgment motions” and because their disclosure “would be highly prejudicial to the SEC,” according to the filing. 

“The Court disagrees,” Judge Torres said. “Regardless of whether the Court ultimately determines that the Hinman Speech Documents are admissible, or whether the Court relies on the documents in ruling on the summary judgment motions, they are judicial documents subject to a strong presumption of public access because they are ‘relevant to the performance of the judicial function and useful in the judicial process.’”

Judge Torres agreed to keep sealed some of Ripple’s documents, including audited financial statements and forecasts.

“Audited financial statements, including past financial statements, contain Ripple’s confidential balance sheet, revenue and expense figures, pricing, costs, revenue, profit information about past and present business lines, investments in third parties, litigation expenses and settlements, and other information that could result in sufficiently serious injury to Ripple if publicly disclosed,” Judge Torres said. 

SEC v. Ripple 

Ripple has been embroiled in a long-standing dispute with the SEC since 2020 when the agency accused the company as well as Garlinghouse and co-founder Christian Larsen with raising $1.3 billion through the sale of XRP.

A decision is still expected this year.