Ripple Counters SEC’s Opposition with New Court Filing

Ripple has submitted a new court filing in its ongoing lawsuit with the Securities and Exchange Commission (SEC), challenging the admissibility of testimony from Andrea Fox, an SEC accountant. 

The motion, originally filed on April 22, requests the exclusion of Fox’s declaration, which Ripple contends the SEC improperly characterized as summary evidence rather than expert testimony. The document emphasizes that Fox was not disclosed as a fact or expert witness during the requisite discovery phases.

#Ripple has submitted a new court filing to oppose the SEC's use of certain witness testimonies, particularly from Andrea Fox, an accountant for the #SEC.

Ripple contends that Fox's declaration should be classified as expert testimony, which was not properly disclosed or…

— Satoshi Talks (@Satoshi_Talks) May 3, 2024

In the filing addressed to Judge Sarah Netburn, Ripple argues that the SEC has not sufficiently demonstrated that Fox’s testimony complies with the classification as summary evidence as required by court rules. This move comes as a response to the SEC’s reliance on Fox’s declaration in its motion for remedies and final judgment, which Ripple claims is a procedural error.

SEC Defends Its Position on Witness Classification

The SEC, in its opposition to Ripple’s motion, has insisted that Fox’s role was that of a summary witness, countering Ripple’s claims that she acted beyond this capacity. The Commission argues that Fox’s declaration involved merely applying basic arithmetic to Ripple’s financial documents, a task that does not necessitate expert analysis. However, Ripple disputes this characterization, noting that the complexity of Fox’s analysis and the inferences drawn from it extend beyond simple arithmetic.

Ripple’s recent filing points out that the SEC’s defense inadequately addresses why Fox’s professional qualifications as an accountant were highlighted if her contribution was intended to be viewed strictly as summary evidence. The implication here, according to Ripple, is that the SEC’s portrayal of Fox straddles the line between a lay summary and expert testimony, leaning more significantly towards the latter.

Analysis of Ripple’s Argument

Ripple further elaborates that Fox’s work, which involved scrutinizing not only Ripple’s records but also third-party evidence and expert reports, utilized specialized accounting knowledge. According to Ripple, this expertise was crucial in forming the calculations for disgorgement, prejudgment interest, and discount amounts that underpin the SEC’s proposed penalty nearing $2 billion. Ripple contests the notion that such tasks could be handled by a non-expert through basic calculation alone.

Moreover, Ripple highlights instances where the SEC itself has utilized Fox’s conclusions in its legal arguments, suggesting reliance on her insights that purportedly go beyond mere summary interpretation. These factors, Ripple asserts, substantiate their claim that Fox’s involvement requires classification as expert testimony, necessitating appropriate disclosure and deposition which did not occur.

This latest development is part of a protracted legal struggle between Ripple and the SEC, which began with the SEC’s allegations that Ripple conducted an unregistered securities offering.

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