Thread by @JohnEDeaton1

THANK GOODNESS FOR JAY CLAYTON

@Ripple, @chrislarsensf & @bgarlinghouse should all thank Clayton. Clayton is on video👇 w/ Grundfest (starting at 41:30) explaining how he likes to go after the individual executives b/c it changes the dynamics of the case.

Grundfest, being smarter than Clayton, cautions that when you go after individual executives it shifts a much higher burden onto the SEC. Clayton’s response to that is:

“Yeah, but it might be worth it.”

In a non-fraud case, it is simply not worth it - nor should you bring it.

If executives engage in fraud or misrepresentation they should be sued. The SEC investigated for 2 1/2 years and didn’t find one instance of fraud or misrepresentation. You can bet it would’ve charged fraud if it could’ve. Despite no fraud, Cayton filed 🆚 the two executives.

You can go back to February 2021 and read my tweets stating I believed charging Brad and Chris w/ aiding and abetting was the biggest mistake the SEC made, and that it was further proof, considering the SEC had zero chance of proving it, the lawsuit was used as a weapon.

Because it filed aiding and abetting claims against the two executives, this case was no longer a straightforward strict liability securities violation case. Without the executives in the case, there would be no recklessness standard being applied. It was a terrible mistake.

Mistakes are made when the motive behind the lawsuit isn’t about enforcing securities laws, but something else. When the people behind filing the lawsuit leave after the case is filed, maybe they don’t care about actually winning the case.

Maybe filing the case was the damage?