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?

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More from @JohnEDeaton1

Feb 25
HUGE EXCULPATORY EVIDENCE:

The August 20, 2018 meeting between Clayton and Hinman with @bgarlinghouse and @JoelKatz.

This meeting is 2 1/2 months AFTER the Hinman speech declaring #BTC and #ETH non-securities.
Frustrated that only 2 of the top 3 cryptocurrencies were provided regulatory clarity, Garlinghouse and Swartz asked what they could do to achieve similar clarity for #XRP with Garlinghouse declaring:

@Ripple is living in purgatory b/c of this lack of clarity regarding #XRP.”
At that moment, if Clayton and Hinman truly believed #XRP was a security, they would’ve informed Garlinghouse and Swartz right then right there!

Instead, Clayton responded:

“the meeting was not the proper forum for a
discussion about that topic."
Read 8 tweets
Feb 23
PREDICTION:

The case against @bgarlinghouse and @chrislarsensf is OVER. It was over the day it was filed. There’s NO WAY the SEC can meet it’s burden. The SEC must prove the two executives had actual knowledge #XRP was a security or was reckless in not knowing.
In order to prove recklessness the SEC must prove a reasonable person would’ve known #XRP was a security b/c it was so clear and obvious to anyone at that time.

LETS REVIEW SOME OF THE EVIDENCE:

1) October 2012 Perkins Coie Memo: It concluded #XRP was not a security;
2) Until April 2018, the SEC allowed staff, including enforcement lawyers, to trade and own Crypto - including #XRP - w/o any restrictions;
Read 16 tweets
Feb 22
Last year @RoslynLayton brilliantly wrote:

“Put two and two together, and the SEC is saying that Ripple and its two top executives had to have reasonable knowledge of something seven years ago that the agency itself wasn’t sure about last Friday.”

forbes.com/sites/roslynla…
We all recently learned just how poetically accurate Dr. Layton was when she wrote that sentence last year.

Two pieces of critical evidence demonstrate her accuracy:

1) The October 2012 Perkins Coie Memo; and

2) The SEC’s June 13, 2018 legal analysis of #XRP.
The Perkins Coie Opinion Memo concluded #XRP was not a security. Although we do not know exactly what the #XRP Memo says, we know what it doesn’t say. Judge Netburn ruled the SEC’s analysis of w/r #XRP is a security is privileged so the public and @Ripple do not get to read it.
Read 12 tweets
Feb 20
Judge Netburn’s decision on the motion for reconsideration will be the biggest decision in the @Ripple case. I say that b/c I don’t believe the motion to strike the FND is a significant one b/c the Judge isn’t deciding w/r Ripple had fair notice, but only w/r it can argue it.
The reconsideration motion relates to the 63 emails containing drafts and comments regarding the Hinman #ETH is no longer a security speech. The final version of the speech discusses both #Bitcoin and #ETH. The final version does not refer or mention #XRP.
#XRP consistently battled #ETH for the number 2 Crypto behind #BTC
In January 2018 - 6 months before the Hinman speech - #XRP hit an all-time high above $3 making it the world's 2nd largest crypto.
Read 10 tweets
Feb 19
UNDISPUTED FACTS TIMELINE ADDITIONS

2012: Perkins Coie (the same law firm that helped write ✍️ Hinman’s #Ether Free Pass Speech) informed @chrislarsensf #RippleCredits (aka #XRP) IS NOT a security;

The 2012 memo warned Larsen there was a risk under the Bank Secrecy Act (BSA);
The 2012 legal memo 📝 stated that the law firm’s “analysis has never been tested by FinCEN in practice, and therefore reliance thereon is not without risk”;

The Perkins Coie 📝 was spot on b/c in:

2015: FinCEN sued @Ripple claiming it had violated the BSA;
FinCEN’s suit against Ripple was the first civil enforcement action against a cryptocurrency industry player - a case of true first impression in the industry;

Ripple settled paying 700K and agreed to comply w/ NON- SECURITIES regulations;
Read 27 tweets
Feb 18
Below is an honest question that many have. I’ve seen a lot of negative comments lately about the judges. Your frustration is misplaced. Plz know, I understand everyone’s anger. But people are unrealistically expecting the judge, on her own volition, to throw out the case.
That’s not how it works. The judge rules on motions that are filed before her. @Ripple has not filed a motion to dismiss the case for any type of wrong-doing. The judge only knows about conflicts of interests and appearances of impropriety b/c I submitted a declaration citing it.
To be candid, the only reason I was able to cite to those conflicts is
b/c the SEC attacked me personally - trying to paint me an unhinged Twitter conspiracy theorist. Unless Ripple files a motion to dismiss based on all of this info, the judge isn’t going to just throw it out.
Read 5 tweets

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