- Ripple Labs has denied class action plaintiff Zakinov’s recent request for release of additional SEC documents.
- The request for release of preliminary and so far unsuccessful settlement discussions with the SEC require heightened scrutiny, according to Ripple’s legal representation.
The U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs is not the only legal action the company is currently facing. The lead plaintiff in the Zakinov vs. Ripple Labs class action lawsuit filed a motion about 2 weeks ago demanding the release of all documents from January 2015 onward in which Ripple communicated with the SEC. The motion included all communications from past settlements, as well as documents in the form of emails, text messages, Slack or other instant messenger messages.
Ripple calls for swift dismissal of motion
A document published on CourtListener now reveals that Ripple is opposing this motion and the release of further documents for 5 reasons. As Ripple Labs’ legal representation claims, the plaintiffs have been “made substantial document productions” over the past two months that the SEC has received in equal measure during the multi-year investigation:
The bulk of the productions consist of documents that Defendants previously provided to the U.S. Securities and Exchange Commission (the “SEC”) in response to voluntary requests during a multi-year investigation by the SEC Staff into the very same question that lies at the heart of this lawsuit—whether Ripple’s distributions of XRP constitute “investment contracts” under SEC v. W.J. Howey Co., 328 U.S. 293, 298-99 (1946).
Further, Ripple’s legal representation states, which will certainly be relevant to the SEC’s litigation, that the SEC staff “demanded numerous categories of documents and asked countless questions about Ripple’s business.” In response, Ripple submitted more than 40 productions consisting of “tens of thousands of documents and hundreds of thousands of pages.” All of these documents were produced to the plaintiffs in the Zakinov case:
Defendants substantially completed their production to Plaintiff of SEC investigation materials on December 16, 2020, with some small supplemental productions that followed. Shortly thereafter, Plaintiff filed the instant motion to compel, escalating to the Court a number of requests that should be swiftly denied.
Moreover, the counsel for Ripple Labs also state that defendants should not be compelled to produce all emails between their outside counsel and SEC staff because the request is “overbroad, burdensome, and not proportional to the needs of the case.”
Among other reasons, Ripple also argues that the plaintiff’s demand for redaction of preliminary and so-far unsuccessful settlement discussions with the SEC requires heightened scrutiny. “Litigants seeking settlement documents must make a particularized showing”, according to Ripple’s response.
Ultimately, according to Ripple, there is also “no basis for Plaintiff’s request that Defendants remove non-privileged redactions from the documents at this time. As discussed above, the documents were
produced to Plaintiff in redacted form because they were produced to the SEC that way.”