Ripple has won most of the minor battles lately in its ongoing fight against the US Securities and Exchange Commission. However, in the last one, the SEC was victorious. The judge rejected Ripple’s request to force the SEC to stop sending Memoranda of Understanding (MOUs) to foreign entities seeking to gather information about the company.
As we previously reported, the SEC was trying to reach out to foreign organizations in search of more information about the blockchain payment company. The SEC was sending MOU requests to regulators in other jurisdictions without sharing this with the court.
CEO Brad Garlinghouse and president Chris Larsen took the matter to court a month ago to end this. Ripple has described the move as a tactic of intimidation to scare the company’s foreign partners. According to the two executives, the SEC not only sent MOU requests to foreign regulators, but also asked them to file “heavy document requests to legal entities under the foreign regulator’s jurisdiction. He told the court that this tactic “had a significant impact on the recipient of the claims, including Ripple’s overseas business partners, and amounts to an unfair intimidation tactic.” However, in the judge Sarah Netburn’s decision, she rejected her motions.
Judge Netburn stated that the SEC is entitled to request information from its foreign colleagues. This is not a new tactic invented by the regulator and has been used in other situations before. “The SEC is a signatory of the Multilateral Memorandum of Understanding and other bilateral agreements that encourage information sharing between foreign countries,” the judge said. He also stated that he took into account all the arguments that Larsen and Garlinghouse presented. These include allegations that the SEC is using intimidation tactics. However, he stated that there was no evidence that the SEC was publishing its requests in bad faith.
“Despite all this, the court concluded that the SEC was allowed to use the claims and did not contradict the court’s jurisdiction.”