The Securities and Exchange Commission (SEC) has argued that a recent court decision further undermines a crucial defense put out by technology company Ripple in its ongoing legal dispute with the SEC.
Fair Notice Claim Weakened, According to the SEC!
The SEC emphasized the judge’s judgment in a different enforcement action it won against investment advisory firm Commonwealth Equity Services in a letter it sent on April 11 to U.S. District Judge Analisa Torres, who is presiding over the SEC vs. Ripple case. In that example, it was determined that a longstanding legal precedent satisfies the requirement of “fair notice.” James K. Filan, a defense lawyer, posted a copy of the letter on his Twitter account.
The SEC’s Defense
One of Ripple’s primary defenses is the claim that the SEC did not provide it fair notice before suing it for securities fraud in December 2020. However, the SEC stated that similar to the Commonwealth case precedent, the long-standing supreme court precedent provides Ripple with fair notice of what a security is and gave rise to the Howey test, which is used to evaluate what qualifies as a security. For the SEC, Commonwealth’s case provides “additional authority” for dismissing Ripple’s defense.
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