Regulation
Pro-XRP Lawyer Spotlights New Ray Of Hope
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In a recent twist in the ongoing legal battle between Ripple Labs and the Securities and Exchange Commission (SEC), Ripple CLO Stuart Alderoty highlighted a significant setback for the SEC. The Second Circuit Court of Appeals rejected the SEC’s appeal in the Aron Govil case, indicating a potential shift in the legal landscape. Moreover, Bill Morgan, a pro-XRP lawyer deemed it as a positive development in the Ripple vs SEC case if the former harnesses it well.
Pro-XRP Lawyer Provides Insight Into Ripple Vs SEC Case
Alderoty’s tweet emphasized the court’s conclusion on Aron Govil case. He noted that the case affirms “if a buyer suffers no financial loss, the SEC is not entitled to disgorgement from the seller.” This development sparked optimism among Ripple supporters as lawyer Bill Morgan sees it as a positive update for the blockchain payments firm. Morgan pointed out the implications of the Govil decision on the Ripple vs SEC case.
In a post on X, Morgan stated, “if institutional investors suffered no pecuniary harm, the fact that the Second Circuit Court of Appeals did not reconsider Govil is a good thing for Ripple.” In the Ripple vs SEC lawsuit, the latter has alleged that institutional investors have suffered $480 million in damages owing to discrimination.
The latest argument stems from the SEC’s claims that Ripple discriminated against institutional investors amid XRP ODL sales. The SEC argues that if Ripple had registered the sales of XRP, as deemed necessary by the court ruling, the case would have been different.
The regulatory body alleged that Ripple would have been obligated to disclose discounts offered to favored institutional investors if it registered the sales properly. This disclosure, according to the SEC, would have allowed non-favored investors the opportunity to negotiate better terms, potentially mitigating harm.
Also Read: Ripple CEO Emphasizes Regulatory Clarity Amid Ongoing XRP Lawsuit
Ripple’s Struggle To Continue?
Despite deeming the SEC’s recent loss as positive for Ripple, Morgan issued a warning. He cautioned that the agency is still pursuing disgorgement based on alleged harm to investors to attain a victory in the Ripple vs SEC battle. Moreover, Morgan emphasized the need to assess the strength of the SEC’s argument against Ripple’s counterarguments. He wrote, “we cannot really assess the strength of the SEC’s argument until we receive Ripple’s brief.”
Digital Perspectives, an XRP-focused page on X, also weighed in on the matter. They highlighted that clients from the institutional sales under question in the Ripple vs SEC case have not incurred financial losses. However, Morgan clarified that the absence of financial losses is not the crux of the SEC’s argument. Instead, he spotlighted the alleged harm resulting from non-disclosure of discounts by Ripple Labs.
Furthermore, Morgan shed light on the SEC v Govil case, where the Second Circuit Court of Appeals found that the district court’s order of disgorgement, despite no finding of pecuniary harm to investors, was erroneous. The SEC is pushing for a similar probe in the Ripple case. Furthermore, it’s firmly arguing that some institutional investors suffered harm due to Ripple’s failure to disclose discounts.
Moreover, Morgan noted that if the SEC is successful in proving its point, Ripple will be in great trouble. Hence, he advised to wait for Ripple’s counter to assess the weight of the SEC’s claims and its potential implications.
Also Read: Ripple Labs Issues Important Warning To Community On Scam Tactics
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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