SEC vs. Ripple Lawsuit; Hinman’s deposition gets the green light

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SEC vs. Ripple Lawsuit

Ex-SEC director William Hinman’s deposition about his 2018 speech has been approved by the court. The U.S. Securities and Exchange Commission’s (SEC) plea to quash Ripple’s request for Hinman’s deposition has been turned down by U.S. District Court Judge Sarah Netburn in a telephonic conference hearing today.

However, the deposition may get delayed for a “brief period” after a meet and confer regarding deliberative process privilege. The response for the final date is due tomorrow, according to a tweet from the Defendant’s lawyer, James K. Filan.

Hinman’s 2018 speech

In 2018 at the Yahoo Finance All Markets Summit: Crypto, William Hinman claimed Ether (ETH) to be a non-security while comparing it to Bitcoin (BTC). Ripple’s defense lawyers have requested Hinman’s deposition on the same statement.

Ripple will be asking Hinman to attest to his rationale behind calling ETH security and then the defense shall continue with follow-ups in comparison to what SEC is currently stating about XRP’s status.

SEC’s counterargument

The SEC argued against the court order after Thursday’s hearing. The Commission expressed concerns about the reputation of the high-ranking positions at government agencies after mandating the deposition of Hinman. It would expose all influential officials to forthcoming depositions of every and any norm.

“(It) would subject high-level government officials to depositions regarding every law, regulation, or policy they consulted on or spoke about and that later underlay an enforcement action…disrupt the functioning of government agencies by discouraging qualified people from public service given the near certainty that their tenures would ensnare them in litigation.”, said SEC in their counterargument of the court order.

Judge’s final call

However, Judge Sarah Netburn allowed the deposition clarifying that as a former “high-ranking official” at the U.S. Securities and Exchange Commission, Hinman holds “substantial authority in a very important federal agency.”

“This is not a run-of-the-mill SEC enforcement case,” Netburn said. The Judge asserted that Hinman’s deposition would not “open the flood gates.” Instead, Judge Sarah Netburn emphasized that this lawsuit, “involves significant policy decisions in our markets, the amount in controversy is substantial and the public’s interest, in this case, is significant.”

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