XRP Lawsuit: Ripple Scores As Judge Rules To Exclude SEC’s Expert Testimony• March 11, 2023 6:10 pm • Comments
As the lawsuit between Ripple and the SEC continues to drag on, it looks like the most recent court decision has once again turned the tides in Ripple’s favor.
District Judge Analisa Torres made a ruling on both parties’ motions to essentially exclude all expert testimony from summary judgement.
This means that the SEC’s “expert” testimony is no longer valid to be used as a claim to what XRP investors were thinking when they first acquired XRP.
After all, such a testimony would not make sense as the only ones that can actually prove what XRP holders were thinking are the XRP holders themselves.
Having a SEC chosen “expert” give such a testimony makes the least sense possible which is no surprise why the testimony has been excluded.
Judge Analisa Torres has issued an initial ruling, but it is not the summary judgment ruling. Instead, the judge has issued a 57-page ruling on both parties’ motions to exclude expert testimony from summary judgment (“Daubert” motions).https://t.co/RsDFRbZxNW
— Michael Branch (@Michael63140627) March 7, 2023
As Chamberlain explains, no clear winner or loser can be derived from the ruling. However, the win goes to Ripple when it comes to one of the most important outcomes of the ruling, the exclusion of the number 1 expert witness, Patrick Doody. This is who the SEC had hired to analyze the expectations of XRP buyers.
XRP community attorney Jeremy Hogan commented on Twitter that the SEC must prove that investors had a “responsible” expectation of profits from Ripple’s efforts, for this Doody was crucial:
And the Judge just struck the SEC’s ONLY Expert Witness on that subject. So, now, how the heck can the SEC prove “reasonable” reliance? Who will testify? Just thinking out loud. 🙂
A ruling in favor of the SEC was made by Judge Torres on expert witness number 3, which Ripple called “irrelevant and unreasonably prejudicial”.
The judge acknowledges that the expert’s testimony “about Defendants’ incentives and actions to influence the price of XRP is directly relevant” to the final element of the Howey test for an investment contract.
As the case has dragged on for so long, it is clear that the SEC has not been able to make any progress in claiming that XRP is a security.
Many speculators and investors believe that a settlement is likely or that it will be escalated all the way up to the Supreme Court.
Based on historical data, cases like these that get escalated to the Supreme Court will often rule in favor of the defendant which means that Ripple has the highest chance of winning.
The judge had also acknowledged that XRP has a use case which should be evaluated as part of the Howey test that is typically used to determine if an asset is a security.
The court’s understanding of that ultimately strengthens Ripple’s case against the SEC.
2. The caveat: the SEC’s expert had his testimony on why people bought XRP excluded. It’s unclear what if any evidence remains on record to support the SEC argument that anyone bought XRP expecting profits solely or substantially from Ripple’s efforts. This might be fatal to SEC.
— Scott Chamberlain (@scotty2ten) March 7, 2023
His views were echoed by the legal expert and amicus curiae for Ripple, John E. Deaton, who agreed with Chamberlain’s analysis and expressed his opinion that “the expert’s preclusion is fatal for the SEC’s summary judgment motion,” which he later told Fox Business’ Charles Gasparino could arrive “any day now or in a couple of weeks.”
As Deaton pointed out in the interview on March 8, Ripple had ten expert witnesses, while the SEC had five, challenged by both sides respectively, and the victory for the blockchain company was the exclusion of the witness “who was going to testify as to what XRP token holders thought in their heads when they purchased XRP.
Meanwhile, he remains a strong believer that Ripple would win the case. His words arrive days after the blockchain company’s CEO Brad Garlinghouse once again questioned the SEC’s conduct, terming its recent onslaught against the crypto industry as an unhealthy way to regulate it.
Torres has granted Ripple's motion to exclude testimony from a so-called expert witness called by the SEC, s case isn't especially strong and that the judge may reach a judgment that enables Ripple to continue its business as before
— Frank Meester (@DomainFrank) March 8, 2023
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