The latest update in the XRP lawsuit saw the court deny Ripple’s Motion to Compel SEC to produce documents reflecting the SEC’s trading preclearance decisions of SEC employees’ transactions in Bitcoin, Ether, or XRP, as well as annual certifications concerning SEC employees’ XRP holdings.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: Defendants’ request for documents reflecting the SEC’s trading preclearance decisions with respect to SEC employees’ transactions in bitcoin, ether, or XRP, and annual certifications concerning SEC employees’ XRP holdings is DENIED. pic.twitter.com/8vGorDaEs2
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) September 21, 2021
Ripple’s Privacy Act Argument falls flat
In its opposition, the SEC had already argued that Ripple’s request has a “low bar of relevance” and is an “unjustified intrusion” into SEC’s employees’ sensitive financials. Ripple argued against SEC’s Privacy Act claims, stating that the defense only seeks aggregate and entirely anonymized data of narrow scope and of a limited timeframe. Ripple ascertains in its response that their motion to compel discovery possesses “no Privacy Act obstacle to the Court ordering production of this information.”
While the defendants appealed for anonymized or aggregated documents, the Court stated that the data related to Ethics Counsel’s preclearance decisions is not sufficiently probative. Furthermore, according to the Court’s decision, partially probative evidence cannot justify the intrusion into SEC employees’ financial conduct, even if anonymized, aggregated, or redacted.
The Court clarified that the Privacy Act protects information retrieved directly or indirectly from a system of records like the SEC’s Personal Trading Compliance System. However, the only way to discard the Privacy Act pursuant to a court order is by providing the court with evidence justifying the disclosure.
Furthermore, ‘the court must accord proper weight to the policies underlying…statutory protections, and…compare them with the factors supporting discovery in a particular lawsuit’. The Court order has also highlighted the defendants’ failure to display that such disclosure is justified in the XRP lawsuit.
The defendant’s annual certification appeal has also been denied through the existing Congress ban of “disclosure of such financial information through federal privacy statutes and regulations in order to maintain government employees’ privacy.” However, the Court directed the SEC to provide Defendants with data supporting SEC counsel’s statement during August 25, 2021, meet and confer that, after the formal order of investigation was issued as to Ripple on March 9, 2019, SEC employees could no longer trade XRP.