Ripple Chief Legal Officer Stuart Alderoty raised concerns around the U.S. Securities and Exchange Commission’s (SEC) recent spree of losses in Court cases under the leadership of Gary Gensler. His comments come in the backdrop of yet another setback for the Commission in a fifth circuit court following the XRP lawsuit victory in July 2023.
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US SEC’s Rule “Arbitrary and Capricious”
On October 31, 2023, the US Court of Appeals for the Fifth Circuit said the Commission’s rule on stock buyback disclosure was arbitrary and capricious. Further, the Court gave the agency a chance to show that it has “reasonably considered the relevant issues and reasonably explained the decision.” This comes after the SEC’s recent losses in XRP lawsuit and Grayscale filing, which could prove to be key for the crypto ecosystem’s regulatory standing in the years to come.
The lawsuit, filed by various business and commerce associations in the US, concerns an SEC rule that requires issuers to report daily share repurchase data once a quarter and to disclose the reason why the issuer repurchased shares of its own stock.
Ripple Legal Chief: “Very Troubling Pattern”
Ripple’s Stuart Alderoty described the development as a “very troubling pattern” of the SEC flouting faithful allegiance to law under SEC Chair Gary Gensler. Responding to the SEC’s latest hurdle in Court Alderoty said,
“Another day and another Court finds that the SEC again acted arbitrarily and capriciously. Is anyone else concerned about this very troubling pattern of the SEC flouting any faithful allegiance to law under Mr. Gensler?”
Earlier on October 25, 2023, Judge Analisa Torres officially granted order on the US SEC’s dropping of charges against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen in the Ripple vs U.S. SEC lawsuit. Also, there has been a development on institutional sales of XRP. Judge Torres sought a joint scheduling brief from the two parties on the matter. The July 13, 2023 Summary Judgment was a split verdict with the ruling handing a victory to Ripple on the retail sale of XRP tokens.
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