Judge Orders SEC to Hand Over Hinman Speech Documents

New York judge Analisa Torres has ordered the Securities and Exchange Commission (SEC) to turn over internal documents, including emails and drafts, related to a speech from former commissioner William Hinman in 2018.

The order marks a big win for Ripple in its legal battle with the regulator, as the story behind the speech may hold the key to dismantling the SEC’s core legal argument. 

Judge Overrules SEC

According to the letter filed by judge Torres on Thursday, the magistrate overruled all three of the commission’s objections to sharing the internal documents of the Hinman speech. 

“The Court has reviewed the remainder of the thorough and well-reasoned Orders for clear error and finds none,” reads the letter from Torres. “Accordingly, the Court OVERRULES the SEC’s objections and directs the SEC to comply with the Orders.”

The SEC was initially called upon to turn over the documents by judge Sarah Netburn in January, finding that they were not protected by deliberative process privilege (DPP). 

The SEC objected to the order in the following month, claiming that the internal speech documents were not relevant to any claim or defense in the case. It also argued that the DPP does, in fact, protect internal speech documents, as does attorney-client privilege. 

However, the court sided with Ripple on the matter, agreeing that the speech documents “may be used to obtain potential impeachment evidence or to impeach witnesses at trial,” including Hinman. 

Furthermore, Torres reasserted that DPP does not apply because the requested documents don’t relate to the SEC’s decision, position, or policy – only Hinman’s personal opinion. Finally, the court will not protect the documents with attorney-client privilege, as they were not clearly intended for “interpret[ing] and apply[ing] legal principles to guide future conduct or assess past conduct.”

What is the Hinman Speech?

Hinman’s speech is well known for having contained comments on Ether’s legal status, with the commissioner expressing his view that the asset – alongside Bitcoin – is not a security. Similarly, Ripple’s legal battle with the SEC concerns whether the company’s sale of XRP years ago constituted an unregistered securities offering. 

Hinman’s internal emails are considered relevant to the case, as some believe Hinman had conflicts of interest related to Ethereum. He previously worked at Simpson Thacher prior to his SEC appointment – a law firm with a seat at the pro-Ethereum “ Enterprise Ethereum Alliance.” He’s since returned to his position with the firm.