The battle between Ripple and the U.S. Securities and Exchange Commission (SEC) continues to ignite more controversy. Ripple has struck back against the SEC’s submission of new expert materials by filing a Motion to Strike in response to the SEC’s Motion for Remedies and Entry of Final Judgment.
For Ripple, what matters is that SEC submitted expert materials late. Andrea Fox, a new expert witness for the SEC, filed a declaration and two exhibits as supplementary evidence, which Ripple contests were not disclosed pursuant to Federal Rule of Civil Procedure and court orders. The submission by the SEC delayed to prove its stand with respect to this issue is a sneaky strategy that can be equated to “sandbagging” according to the company.
The timeline of events reveals a prolonged discovery process, spanning over three months, during which Ripple and the SEC exchanged information regarding remedies. Ripple submitted expert reports on disgorgement, including a supplemental report in December 2023, well before the remedies discovery deadline. However, the SEC’s submission of the Fox Declaration came more than a month after the discovery deadline had passed, raising questions about procedural fairness.
SEC’s “Summary Witness” vs. Ripple’s Expert Analysis
Andrea Fox’s role and expertise are at the heart of the dispute. The SEC characterizes her as a “summary witness,” while the company argues that her testimony goes beyond mere summarization and constitutes expert analysis. Fox’s declaration delves into accounting analysis and calculations related to Ripple’s alleged violations, leading it to assert that she should have been disclosed as an expert witness in a timely manner.
Ripple’s move demonstrates what could happen if the Fox Declaration isn’t invalidated. Such legal experts as XRP attorney Bill Morgan have also joined in on this argument, stating that the SEC waited too long to submit the document deliberately. The SEC case against the company for disgorgement and potential pecuniary harm to institutional investors may be significantly weakened by removing Fox’s testimony from it.
The consequences of this motion go much further than a simple court dispute. In its success, the company may render the disgorgement power of the SEC questionable, based on investors’ pecuniary losses concept. It also brings out broader problems with procedural integrity and fairness in high-profile lawsuits.
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