Thread by @JohnEDeaton1

@EleanorTerrett and I were discussing the Judge’s ruling today
b/c, as usual, her and @CGasparino seem to be the only journalists recognizing the magnitude of this case on the overall Digital Asset space. I re-read the decision and here are my final takeaways:

https://twitter.com/cgasparino/status/1483832891876548608

The June 13, 2018 legal memorandum 📝 regarding whether #XRP is a security (conducted by SEC legal staff) IS PRIVILEGED and will NOT be turned over.

But the Judge noted that the legal staff members who wrote this analysis:

“did not present a recommendation to the SEC.”

This finding is VERY significant. This means that after the SEC’s legal analysis, as of June 13, 2018, they did not recommend bringing an enforcement action against @Ripple @bgarlinghouse or @chrislarsensf regarding #XRP as a security.

The judge also noted that this June 13, 2018 date is BEFORE the SEC opened its formal investigation of Ripple AND before @bgarlinghouse met with Clayton and Hinman.

But this too is very significant b/c when Clayton and Hinman met Garlinghouse months after the memo was written, Garlinghouse spoke out and said “Ripple is living in purgatory” regarding #XRP’s status. Neither Hinman nor Clayton responded by informing him #XRP was a security!

Being objective, this memo likely said we need more information before we can make a recommendation one way or the other regarding #XRP. But I find it significant that as of June 13, 2018, the SEC legal team DID NOT believe it was a clear cut case that #XRP was or is a security.

Otherwise, it would’ve recommended an enforcement action. At a minimum, it supports what I’ve said from the beginning and that is: if the SEC truly believed #XRP was a security it would’ve sought an injunction to stop Ripple and @JedMcCaleb’s ongoing sales.

https://twitter.com/JohnEDeaton1/status/1483127515581497348

The biggest victory for Ripple and #XRPHolders, from Judge Netburn’s recent decision, isn’t necessarily the email with the Draft version of the Hinman speech. The most significant victory could prove to be the notes from meetings with 3rd parties not associated w/ Ripple.

Who do you think those 3rd parties are? On December 13, 2017, @ethereumJoseph and @ConsenSys met with Hinman and others. We know the VC Working Group headed by Perkins Coie (a member of the EEA) hired by @a16z met on March 28, 2018. Lubin met w/ SEC again on June 8, 2018.

These notes are no doubt from the above meetings. Judge Netburn ruled the SEC can still invoke attorney client privilege regarding the personal notes 📝 by Valerie Szczepanik and others, but if the notes contain statements made by the people at the meetings - its NOT privileged.

Was #XRP brought up by anyone at these meetings? Did anyone try and distinguish #Ether from #XRP at these meetings? Was #Ether brought up at all? #BTC?

I have no idea. But guess who’s filing a new FOIA request based on Judge Netburn’s finding its not covered by DPP?

The final takeaway, obviously, is the email w/ Hinman’s speech. It’s the email sent to 63 people with a draft of the speech attached. The SEC claimed because Hinman was asking for feedback from other SEC staff, that the email was privileged.

What the Judge found is very good for Ripple, but it has caused a lot of confusion for many #XRPHolders. The Judge held:

“The question of whether Hinman’s speech reflected his own opinions and not the agency’s is settled.”

The Judge cited Hinman’s affidavit that the SEC had him sign as well as multiple letter motions filed by the SEC that state the speech was NOT an SEC opinion or declaration, but only Hinman’s personal opinion.

The Judge also relied on the affidavit which states to date the SEC has NOT taken a position on #Ether.

Because both the SEC and Hinman stated his speech was only his opinion, the email IS NOT privileged. We know this email was sent to 63 people.

We know from @EleanorTerrett and @CGasparino’s reporting that Clayton was one of the people that provided input to Hinman. We know from the Hinman deposition that @HesterPeirce did not get a copy of the Draft.

As a final interesting side note, although Hester Peirce did not get a copy of the Draft Speech, one of the note takers at one or more of the meetings was Attorney Richard Gabbert. Who is he? He was Counsel to SEC Commissioner Hester Pierce. 🤔

Think about this quandary for Hinman:

The SEC threw you under the bus 🚃 and had you sign an affidavit saying it was only your opinion. If it wasn’t meant to be SEC guidance then

WHY DID YOU GRATUITOUSLY GRANT A REGULATORY FREE PASS TO #ETHER?

Maybe he will tell Gasparino.