Court Denies SEC's Request Seeking Years of Financial Records From Ripple Execs

The judge said the request was irrelevant and disproportional.

Apr 13, 2021 at 9:31 a.m. UTC
Updated Sep 14, 2021 at 12:39 p.m. UTC

A federal judge has granted a motion to dismiss the U.S. Securities and Exchange Commission's (SEC) request to peer into years' worth of financial records belonging to Ripple executives.

A court document from Judge Sarah Netburn of the U.S. District Court for the Southern District of New York, filed on Friday, shows the SEC's request for eight years of financial data belonging to Ripple's Brad Garlinghouse and Chris Larsen has been denied.

CEO Garlinghouse and Executive Chairman Larsen asked the courts to quash the request by the securities regulator last month, labeling the request as a "wholly inappropriate overreach."

The development means Ripple has scored a second victory in its fight against the regulator after having won the right last week to look into the SEC's internal communications over how it classifies cryptocurrency as a security.

Netburn said the SEC's request for personal financial records, outside of those belonging to transactions relating to XRP, that were already promised by the executives, was irrelevant and disproportional to the "needs of the case."

"The SEC shall withdraw its requests for production seeking the individual defendants’ personal financial records and withdraw its third-party subpoenas seeking the same," wrote Netburn.

However, should discovery progress to a point where the SEC uncovers evidence demonstrating Garlinghouse and Larsen lied about their XRP transaction records, Netburn said the regulator may renew its application.

In December, the SEC sued Ripple, Garlinghouse and Larsen alleging the company and its executives had sold XRP to retail investors in direct violation of U.S. federal securities laws.

See the court document in full below:

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