SEC Defends Testimony Use Against Ripple in Ongoing Legal Battle

SEC Defends Testimony Use Against Ripple in Ongoing Legal Battle

RegulationLaw

By Jakub Lazurek

30 Apr 2024 (3 months ago)

2 min read

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SEC rebuts Ripple's attempt to dismiss accountant's testimony in legal showdown

SEC counters Ripple’s legal motion in ongoing lawsuit—The Securities and Exchange Commission (SEC) has responded to Ripple Labs's recent legal challenge regarding the testimony of SEC accountant Andrea Fox. Ripple sought to dismiss Fox’s declaration, claiming it was undisclosed expert testimony. However, the SEC argues that her testimony is acceptable as summary evidence under Federal Rule of Evidence 1006, primarily involving basic calculations from Ripple’s financial records, without any expert insight.

Ripple’s allegations against Fox's testimony—Ripple contends that Fox’s role exceeded simple summarization by delving into financial analysis and making critical decisions regarding financial categorizations. The company argues this requires disclosure as expert testimony. Contrarily, the SEC maintains that Fox’s calculations are straightforward and do not constitute expert analysis, as they involve no opinions or specialized skills.

SEC’s defense of Fox’s declaration—The SEC emphasizes that Fox’s contribution was to simplify large amounts of financial data for the court, avoiding any expert judgment or specialized knowledge. They argue that using assumptions in handling data is standard practice for summary witnesses, which does not elevate the evidence to the level of expert testimony.

Legal precedents and procedural norms—The SEC references legal precedents to support the appropriateness of assumptions made by summary witnesses in court cases. They state that Fox’s work fits within the normal scope of a summary witness as outlined by Federal Rule of Civil Procedure 26(a)(2), which defines expert witnesses as those who provide specialized knowledge. According to the SEC, Fox did not offer such knowledge and was not required to be disclosed as an expert.

Commentary on the SEC’s approach—The case, particularly the SEC’s focus, has drawn criticism for prioritizing investor protection against missed profit opportunities over addressing larger systemic issues, such as those exposed by the FTX collapse.

This reflects ongoing concerns about the SEC's regulatory effectiveness in the rapidly evolving cryptocurrency landscape. This compressed version of the article delivers the essential details in a straightforward manner suitable for B2 English level and non-native speakers, emphasizing the key points in each paragraph for easier understanding.

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