Another Major Defeat for SEC, As Judge Torres Orders SEC to Surrender Hinman’s Documents to Ripple

Ripple records yet another victory in the lawsuit. 

Judge Analisa Torres has overruled the SEC’s objection to Judge Sarah Netburn’s ruling, ordering the securities regulators to surrender the draft of William Hinman’s speech to Ripple. 

Recall that the SEC filed an objection to Judge Netburn’s ruling on Hinman’s documents, arguing that the magistrate erred by stating that the attorney-client privilege does not protect the drafts of the speech. 

Judge Torres’ Verdict

In response to the SEC’s objection, Judge Torres said there is no need to reconsider the order because magistrate Netburn ruling on the matter is not contrary to law or clearly erroneous. 

While Judge Torres agrees with some of the claims made by the SEC, she still thinks her colleague’s ruling did not contravene the law. 

“Therefore, the SEC’s objections to Judge Netburn’s findings with respect to the relevance of the Internal Speech Documents are OVERRULED,” Judge Torres said. 

Additionally, Judge Torres also noted that Judge Netburn did not err in determining that the drafts of Hinman’s controversial speech are concerning any agency deliberations regarding the regulation of crypto assets. 

“The Court finds that the SEC has not carried its ‘heavy burden’ of showing that Judge Netburn’s determination was clearly erroneous […] Therefore, the SEC’s objections to Judge Netburn’s findings concerning the SEC’s assertions of the DPP are OVERRULED […] For the foregoing reasons, the Court OVERRULES the SEC’s objections and directs the SEC to comply with the Orders,” Judge Torres rules. 

Battle Over Hinman’s Documents

Both Ripple and the SEC have been at loggerheads over the 2018 controversial speech made by Hinman, the former director of the commission’s Corporate Finance. 

Ripple believes the drafts of Hinman’s speech would aid its fair notice defense. However, the SEC has been fighting to keep the documents from Ripple’s reach, claiming that the drafts contain internal communication of the agency’s staff. 

Many crypto and legal practitioners have speculated that the SEC would prefer to settle with Ripple than surrender the documents. However, if the SEC refuses to turn over the Hinman documents to Ripple, the agency may opt for a tougher approach to keep the documents. 

This time, the SEC might want to file an interlocutory appeal to the Second Circuit to counter the recent order of Judge Torres. However, the SEC would need to first get an interlocutory clearance from Judge Torres to make this happen, a request that attorney James K. Filan believes will not be granted. 

With the SEC left with limited options, it is expected that the SEC could be prompted to settle with Ripple, to avoid surrendering the drafts of Hinman’s speech. 

Interestingly, Ripple investors reacted positively to the event, as the price of XRP skyrocketed moments after Judge Torres overruled SEC’s objection to Judge Netburn’s order. At press time, XRP is trading at $0.485, up 7.8% in the last 24 hours, according to Coingecko data. 

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