The United States Securities and Exchange Commission [SEC] presented his “Brief Letter” on the list of internal documents, which according to the agency, were protected by the privilege of the deliberative process [DPP] and attorney-client privilege. According to the presentation provided by an attorney James K. Filan, The SEC stated that “every document that will be reviewed by Justice Netburn, in the chamber, is a privilege.”
While the SEC noted several documents requested by Ripple and the court, for the ongoing lawsuit, it also noted that,
“… The documents are irrelevant to Defendants ‘proposed defenses, even under the Defendants’ relevance theory. Defendants seek the documents to present a defense (totally incorrect) that “SEC staff… questioned whether XRP and other digital assets were securities” and, therefore, Defendants are not liable. Motion at 4. But none of the documents in Appendix A, except Entry 2, addresses whether XRP transactions are securities. “
The SEC further noted that there was no jurisdiction to override the DPP. The only time DPP can be overcome is by showing that disclosure outweighs the interest in nondisclosures. Citing Export-Import Bank v Asia Pulp & Paper Co., Ltd. the SEC noted that the court must consider the following factors, before voiding a DPP.
“1) the relevance of the privileged test;
2) the availability of other tests;
3) the seriousness of the dispute;
4) the role of the government in litigation; and
5) the possibility of future shyness on the part of government employees ”.
The SEC noted that the current report focused on the first and fifth factors, “which greatly favor nondisclosure.” Meanwhile, they also added that the documents listed did not address the application of Howey’s test to XRP. Furthermore, it did not contain information on whether it was reasonable to view XRP transactions as securities transactions.
The SEC added,
Rather, the documents relate largely to other regulatory issues. As in this case, transactions in digital assets can raise issues related to the registration requirements of Section 5 of the Securities Act of 1933 and whether the transactions constitute offers and sales of investment contracts under the Howey test. But transactions in digital assets, as with any other financial instrument, pose other problems under federal securities laws. “
In essence, the SEC wanted to prevent Ripple from getting its hands on documents that were “predecisional and deliberative” in the next review in the chamber. The SEC persevered to establish the DPP and wanted Judge Netburn to review the documents and make a decision before turning anything over to Ripple.
The lawsuit has been ongoing since December and is still far from the discovery phase. The constant back and forth between Ripple and the SEC has extended the fact-finding phase that was supposed to end on August 31.
This is a machine translation of our English version.