Thread by @JohnEDeaton1

THE WORST 🧵 I’VE EVER WRITTEN (I’m sorry)

One question I get asked every time I’m on a podcast or being interviewed, is to provide an estimate of how long the @SECGov 🆚 @Ripple case will take to resolve either by settlement or by judgement.

https://twitter.com/jayvthegreat/status/1485746385215500291

If you’ve watched those interviews, you know I placed a lot of emphasis on the 👩‍⚖️ Judge’s DPP ruling.

I said if the Judge pierced the deliberative process privilege and ordered the SEC internal documents produced, we could see a settlement w/in 90 days thereof.

I also said if the Judge 👩‍⚖️ rules the documents don’t have to be produced to Ripple, I believe the case will go to Summary Judgement; and, possibly, a jury verdict.

The judge gave a mixed ruling. The SEC’s big victory is that most of the documents DO NOT have to be produced.

The Judge gave Ripple two victories: 1) she ruled the emails w/ Hinman’s draft speech are not privileged and must be turned over; 2) notes 📝 taken by SEC lawyers regarding meetings w/ 3rd parties not associated w/ Ripple (ie @ConsenSys, @ethereumJoseph, etc) must be produced.

Finally, the Judge noted that the SEC could redact notes from SEC attorneys if those notes reflected the mental impressions of SEC attorneys. In short, notes reflecting exactly what the #Ether investors said during these meetings - Ripple will get to read.

As I said to @EleanorTerrett and @CGasparino on their Crypto Friday Twitter Live feed, if the emails and notes contain exculpatory evidence for Ripple or damming evidence against the SEC, it could lead to a settlement but until the SEC is FORCED to turn them over - it won’t.

Today’s decision on allowing the SEC to file a motion to reconsider is terrible news related to the timing issue. Without question, today’s decision will cause more delay.

I hate to be the bearer of bad news but I promised to always give my honest assessment - good or bad.

Here’s how it’s likely to play out. The motion papers will all be served on February 25. It is fair to assume the Judge will likely take 1-2 weeks to issue a ruling. That brings us to mid-March. The losing side then has 14 days to file objections before Judge Torres.

There is no doubt whoever loses will appeal to Judge Torres. Before all the paperwork is filed, related to the objections, it will, at best, be mid-April. How long will it take for Judge Torres to rule on the objections? I don’t know, but 30 days is certainly fair to assume.

If she does take 30 days, it brings us to mid-May. Although expert depositions will be over on Feb. 28, how does Ripple finalize its Summary Judgement motions not knowing what these documents contain?

Ripple might need to seek leave from the Court for an expert to supplement his/her report incorporating some of these documents.
At best, oral arguments could be at the end of May.

But ask yourself this: if both Judge Netburn and Judge Torres rule the Hinman emails w/ the draft speech must be turned over to Ripple, will the SEC finally agree? Or, will the SEC attempt to file an interlocutory appeal to the 2nd Circuit Court of Appeals?

FYI, interlocutory appeals for matters related to discovery motions are generally not allowed. But will that stop the SEC from attempting it, thus, causing another 30-60 day delay? Believe it or not, the SEC could attempt to file a Writ of Mandamus before the 2nd Circuit.

I’ve said from day one this lawsuit was used as a weapon. I’ve said from the beginning this case was never and is not about enforcing securities laws. Remember when we received the SEC’s objection to my Writ of Mandamus? Do you remember what it said?

“Thus, the Commission’s enforcement proceeding in the Southern District of New York, brought under the Securities Act, supplies the exclusive method for testing the validity of the Commission’s complaint against Ripple.”

In other words, the Judges and the Court will test the validity of the SEC’s claim that #XRP is a security.

In short, the SEC has admitted, in a legal pleading filed against our Writ of Mandamus, that it does not decide what is or isn’t a security. Simply, incredible. 🤦‍♂️

If this case was truly about “testing the validity” then the SEC would honor the Judge’s rulings, submit the evidence before the Court, and have the Court test the validity. More delays don’t test the validity of the allegations. More delays cause maximum damage and hurts Ripple.

I submit to the Court and the World, delays hurt #XRPHolders more. But that seems to be lost on everyone - except us.

What’s worse than anything, is that there’s a settlement to be made that benefits all parties - the SEC, Ripple, #XRPHolders, and even you @GaryGensler.