Big win for Ripple? SEC now ordered to release 68 drafts of Hinman’s speech

Judge Netburn insists SEC release Hinman’s speech

A document dated April 11th shows that Judge Sarah Netburn of the Southern District of New York federal court has denied SEC’s motion for reconsideration of the (Deliberative Process Privilege) DPP ruling on former director William Hinman’s speech, where he reportedly described how securities laws apply to digital assets.

The regulator is now required to release Hinman’s email to Ripple or file an objection to the decision to District Judge Torres, which many believe would place the regulator in a “hurt locker.”  

Why Hinman’s speech matters to Ripple

In June 2018, the former director of Corporation Finance, William Hinman, made a speech at a conference where he stated that Ether (ETH) doesn’t identify as a security, despite ETH being launched during an Initial Coin Offering (ICO). Although Hinman’s speech appeared on SEC’s website, the regulator disclaimed the guidance, saying it was Hinman’s personal opinion. 

Based on this claim, Hinman’s speech isn’t supposed to be protected under the DPP ruling – an executive privilege that protects information showing the process by which a government agency reached a particular decision. However, the SEC later turned around to say the speech was from Corporation Finance, to which Judge Netburn said:

The SEC’s assertion that the Speech was intended to communicate Corporation Finance’s approach to regulating digital asset offerings is inconsistent with the SEC’s and Hinman’s previous position that the Speech was intended to and did reflect his personal views.

The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy, or it was not. Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position.