The U.S. Securities and Exchange Commission (SEC) wants a federal court to grant it access to the personal finance records of Ripple’s executives. However, officials of the payments company said “how much money they spend at the grocery store every week” isn’t relevant to the securities lawsuit the SEC has filed against Ripple.
The SEC filed the lawsuit in December 2020, claiming that Ripple Labs sold unregistered securities in XRP. Since then, the two entities have been battling it out in the courtrooms over how to proceed with the landmark lawsuit.
In the latest twist, the SEC has been pursuing the personal finance records of Ripple’s current and former CEOs, Brad Garlinghouse and Chris Larsen respectively. The regulator issued subpoenas against six banks the two have been using since 2013. These are Silver Lake Bank, the Federal Reserve Bank of New York, Silvergate Bank, Citibank, First Republic Bank and SVB Financial Group.
Ripple’s executives have hit back at the SEC through their legal team. James Filan, one of the lawyers representing the two Ripple higher-ups, revealed his team’s filing with the New York Supreme Court.
According to the filing, the defendants have already agreed to provide all the relevant documents. The SEC’s attempt to access even the personal financial records is an overreach, they allege.
“The SEC’s multi-front attempt to troll through the Individual Defendant’s personal financial information in a non-fraud litigation, where the Defendants have already agreed to produce the relevant information regarding the challenged transactions, is a wholly inappropriate overreach,” they said.
The lawyers argued that the individual defendants’ personal financial lives weren’t relevant to the case. This hasn’t stopped the regulator from making every effort to acquire the documents, with the lawyers stating, “As drafted, therefore, these requests demand everything from the proceeds of unrelated business activities to how much money they spend at the grocery store every week.”
The lawyers believe that the law doesn’t support the SEC’s “sweeping theory.” The regulator is engaging in a fishing expedition, they claim, further accusing the SEC of harassment. They believe that the defendants are entitled to privacy.
Aside from the defendants, many in the digital currency and the legal industries have had their say regarding the lawsuit. Nancy Wojtas and Rodrigo Seira, attorneys at Cooley LLP, recently wrote a blog post on the case, delving into how important it is for the broader digital currency ecosystem.
“Looking forward, the SEC’s case against Ripple, Garlinghouse and Larsen has the potential to establish additional meaningful precedent for the application of securities laws to the sale of digital assets,” the two lawyers claim.