Thread by @CryptoLawUS

HEARING: Judge Netburn calls Hinman's 2018 #ETH speech "the central question" of this hearing. She called the SEC's bluff by essentially asking - if it was just his personal opinion, why can't he sit for a deposition and answer questions about it?

SEC denies "any such tension exists" even though SEC staff participated in the drafting of the speech and it was all "pre-decisional" -- which is where Netburn stopped the SEC lawyer to say, "Pre-decisional? That means a decision was made...."

The SEC argues that the agency does not "speak" through its staff or individual commissioners but only through no action letters or enforcement actions, so anything Hinman ever said is privileged as "deliberative". Netburn pauses for a long time.

Netburn asks the SEC if the deliberative process privilege would be invoked if Hinman was deposed and asked why he thought #ETH is not a security, and why did you say it? - The SEC says "absolutely, yes", because Hinman's answer would involve "information" he got from staff...

Counsel for @Ripple responds that Hinman's answers are relevant in part because of the high relevance of the #ETH speech in their defense and Jay Clayton pointed to it in a letter to Congress as an example of the SEC's "transparency" on how it was treating cryptocurrencies

Ripple counsel also says it must be determined whether the SEC endorsed the speech, which it denies, as part of the fair notice defense. He also challenges the precedent SEC cites to argue deliberative privilege.

Ripple also notes that Hinman is not an official, and has not taken any action to quash the deposition on his own, and demolishes SEC argument about alleged chilling effect on people seeking govt positions for fear of future subpoenas.

Ripple counsel notes Hinman met the founder of the @ETH Foundation, representatives of @Consensys and believes he had more conversations that they have not been able to discover, and asking him is the only way to determine it. Netburn says "there are easier and less intrusive..."

"...ways to get that information" such as from his calendar, from his senior staff at the time, so the argument isn't, on its own, a justification for a deposition.

Ripple counsel replied that they don't know who was involved in every meeting, and he is the single best source for certainty. He is also "uniquely situated" to determine whether the #ETH speech was "adopted or endorsed" by the SEC. Crucial for fair notice defense at trial.

It is also important to probe whether Hinman heard or understood that market participants TOOK his speech as guidance and what the industry reaction was to it. Also, if the #ETH speech was "decisional", all his statements and actions after were "post-decisional".

Ripple also notes that the SEC's complaint says #XRP was always a security, and this is a remarkable and unusual allegation. He cites other "unusual cases" where officials have been deposed because "they inserted themselves" in the process like Hinman clearly did in #ETH speech

Counsel for @chrislarsensf adds the "personal views" vs SEC lack of clarity "demands" a deposition to get at key information.

SEC jumps in at what appeared to be the end (and not appearing to be in their favor) and insists on "litigating" the deliberative privilege issue. She adds the SEC seems intent on objecting to every question in a deposition if it happens.

Netburn interrupts the SEC lawyer and says she raised a precedent case in her arguments that everyone had to scramble to read, including her, where the deposition ended up happening. Is she sure she wants to cite that, the judge asks?

The SEC indicates they cited it with an apparent desire to litigate deliberative privilege (i.e. drag this thing out even more). They also try to cite a fragment of a previous hearing to argue Ripple only wanted to ask Hinman about #XRP, which Ripple counsel shoots down.

Defendant's counsel shoots back that Hinman confirmed he met with #ETH Foundation one week before the #ETH speech - that is not "deliberative process" and can't be privileged. SEC counsel jumps in and sputters.

SEC says it sees all of Hinman's conversations with #ETH Foundation before the #ETH speech "was deliberative and therefore covered by privilege" and they will "instruct Director Hinman not to answer" in a deposition. (i.e. Ethereum Foundation is now also being defended by SEC)

Netburn proceeds to a ruling...