SEC vs Ripple: SEC Files Opposition to Ripple’s Motion to Strike Expert Data

The Securities and Exchange Commission (SEC) has filed an opposition to Ripple Labs’ motion to preclude the declaration of a critical expert witness in the ongoing litigation surrounding XRP’s status. The controversy revolves around Ripple’s argument that Andrea Fox’s statement, the “Fox Declaration,” is an unsolicited expert opinion.

The SEC repudiates this, stating that the declaration is, in fact, an admissible summary witness statement under Federal Rule of Evidence 1006 and is utilized for calculations related to disgorgement.

#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has filed its opposition to @Ripple’s Motion to Strike new expert materials. pic.twitter.com/qwVyGJI8ZS

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) April 29, 2024

SEC’s Defense of Summary Witness Use

The SEC’s opposition reveals the Fox Declaration’s function, assisting the court by taking some parts of Ripple’s financial and sales records and calculating prejudgment interest over what is called “ill-gotten gains” by the SEC.

The document mainly consists of information derived from documents generated by Ripple itself such as audited financial statements, and tax returns, among others.

The SEC identifies that the declaration is not an award or any particular professional’s testimony but rather makes use of arithmetic to bring clarity to the court as regards Ripple’s accounting.

Admissibility of Summary Evidence

The SEC notes, as part of their argument, that Ripple does not contest to the math accuracy in the Fox Declaration. However, Ripple takes issue with the form of the declaration and believes it should be treated as expert testimony. In response to this argument, the SEC cites case law holding that summary evidence does not qualify as expert testimony. The SEC draws attention to cases where the application of accounting methods or the presentation of summary information did not elevate a declaration to the level of expert opinion.

The SEC’s filing also mentions that although Andrea Fox has a professional qualification as an accountant, the Fox Declaration fails to use her specialized knowledge beyond basic arithmetic applied to Ripple’s financial information. 

It insists that Fox did not issue any material decisions regarding Ripple’s financial policies or give any views on Ripple’s accounting for revenues and expenditures. Instead, she was to sum up large amounts of data so that the court could get to see it in a more comprehensible form.

Ripple’s Prior Unsuccessful Objection

The SEC also notes that Judge Torres previously rejected Ripple’s identical objection in a case involving another SEC staff accountant’s declaration. This precedent argues that Ripple’s current objections should likewise be dismissed.

Consequently, the SEC assures that there has been no violation of the Federal Rules of Civil Procedure. According to the SEC, the Fox Declaration did not require disclosure as expert testimony in advance because it does not fall under the categories necessitating such pretrial disclosure. Therefore, the SEC maintains that Ripple should not be surprised or prejudiced by the submission of the summary witness declaration.

Meanwhile, the XRP price has been under bearish momentum, swaying between an intra-day high and low of $0.5183 and $0.4996, respectively. XRP traded at $0.5183 at press time, a 0.67% dip. Concurrently, its market capitalization fell by 0.59% to $28,369,008,553 while its 24-hour trading volume surged by 126% to $1,176,508,306. 

Read Also: FTX, Voyager Secure $450M Settlement in Bankruptcy