A securities law expert has shared key insights into the recent ruling by the presiding judge on the admissibility of expert testimony in the ongoing legal dispute between Ripple Labs Inc and the US Securities and Exchange Commission (SEC).
Judge’s Credibility Spotlighted
According to the Twitter user @MetaLawman, who claims to have handled a number of securities cases in the Southern District of New York, the judge has an excellent grasp of XRP and the technology that underpins it. He praised the judge’s “excellent command of the legal issues, claims, and defenses in the case.”
The law veteran believes that the judge’s rulings on admissibility are legally sound and that they are unlikely to be disturbed on appeal. However, given the high stakes of the case, it is expected that the decision will be appealed regardless of the outcome.
The judge sustained Ripple’s objection to expert testimony that the SEC wanted to offer about the intentions of XRP purchasers. This is a setback for the SEC because the reasonable expectations of purchasers are a component of the Howey test for defining an investment contract.
SEC’s Objections Overruled
On the other hand, the judge overruled the SEC’s objections to expert testimony that XRP is not treated as a security in the IRS code, that it should not be treated as a security under Generally Accepted Accounting Principles (GAAP), and that it has “commercial utility” in several use cases. These concepts are simple and easily understood by jurors.
According to the law expert, these rulings were a net positive for Ripple and XRP holders. However, he acknowledged that it doesn’t necessarily mean that Ripple will win the case on summary judgment.
Summary Judgment Win for SEC Unlikely
Despite this, the expert believes that the judge’s rulings make a summary judgment win for the SEC unlikely, given the extensive legal analysis of claims and defenses that went into these rulings.
Brad Garlinghouse, CEO of Ripple, took a swipe at the SEC, reacting to recent setbacks the agency has taken since Monday. The SEC has suffered three setbacks in court this week, including the Ripple case.
Garlinghouse tweeted, “It’s only Tuesday, but shaping up to be a not-so-great week for the SEC (this ruling, Voyager, Grayscale).” He was referring to recent developments that have gone against the SEC, including the recent ruling in the Ripple case.
As the legal battle between Ripple and the SEC continues, experts are closely analyzing every development in the case. The recent ruling on the admissibility of expert testimony is seen as a net positive for Ripple, but the outcome of the case is far from certain. The judge’s extensive legal analysis of claims and defenses suggests that a summary judgment decision may be imminent.