In a new YouTube video, Jeremy Hogan of Hogan & Hogan law firm discusses the latest developments regarding the SEC’s case against Ripple.
As Hogan pointed out, two SEC commissioners made comments that contradict a statement made by the SEC chairman. The mentioned overviews specifically touched on how the SEC handled deals with companies being sued.
The first of the two views was published by SEC Vice-President Allison Herren Lee and was quite different from the previous policy. Lee wrote in his statement that the SEC’s Enforcement Agency will no longer propose compromise proposals tied to a waiver to the Commission.
“This return to the department’s longstanding practice allows the waivers to be considered prospectively and focused on protecting investors, the market, and market participants from non-compliance. Violation of certain provisions of federal securities laws automatically leads to disqualification from the use of certain privileges, including being considered a Well-Known Experienced Issuer (WKSI). ”
Hogan thinks this view is particularly relevant to the Ripple case. According to Hogan, Ripple may have offered the SEC a deal that the SEC rejected and led to the disclosure. According to Hogan, the deal could be that Ripple will take the sale of XRP under the SEC umbrella, but still have the ability to sell XRP to large investors.
However, Hester M. Peirce and Elad L. Roisman also made a statement later on “about the contingent settlement proposals”. As Hogan points out, this is “very abnormal”. Peirce and Roisman disagree with Vice President Lee. The statement stated:
“For the reasons outlined above, we do not agree with Deputy Chairman Lee’s attempt to annul this policy by prompting the Enforcement Office to refuse to make contingent conciliation proposals to the Commission for consideration. This change marks a return to a cumbersome process that treats what is actually interrelated entirely separately. It introduces an artificial distinction between the process of making a decision about an entity’s securities laws violations and the process of obtaining clarity on the collateral consequences of those violations. The result will be a longer time between initiation and resolution of enforcement issues. We do not see how this result advances the Commission’s mission or serves the interests of investors. ”
As Hogan points out, this reinforces Ripple’s notion that there should be a deal proposal to the SEC. The lawyer added that there is currently no SEC case large enough to trigger this debate.
“The matter is not over until Mr. Gensler is approved as the new chairman of the SEC. From now on he will make that decision and when will it be approved? It was not even planned for her election. […] He’s a crypto expert and doesn’t want to see Ripple go to Japan. But that’s just my opinion […] I believe Gensler will approve the deal that I believe Ripple is proposing. I no longer believe that the most likely outcome is that this case will continue until the end of the year. The main reason I say this is not that I trust Gensler so much, but I feel Ripple accepts more than I had previously imagined, and so I feel the parties are much closer to a settlement than I thought possible. ”
To sum up, according to the famous lawyer, a dispute arose within the SEC over how settlements would be handled, possibly due to a compromise proposal from Ripple. A deal between Ripple and SEC could happen very soon.