According to the briefing schedule, the remedies-related discovery process will commence on the date of the court scheduling order.
Notably, the SEC plans to obtain remedies-related discovery that post-dates the December 2020 complaint. The SEC argued that the post-dated discovery is relevant for ‘injunctive and monetary remedies.’
The SEC is eyeing a punitive penalty of around $770 million. Remedies-related discovery will likely include Ripple’s financial statements. The SEC could attempt to limit business expense deductions from total earnings.
Attorney Jeremy Hogan recently shared his views on the permutations of a settlement. Hogan believes the SEC could estimate disgorgement damages and place the burden of proof on Ripple to refute the damages. Hogan also noted that the SEC may argue that Ripple incurred expenses that contributed to further violations, supporting an argument to exclude them from business expenses.
Hogan and amicus Curiae attorney John E. Deaton believe the penalty will be substantially less than $770 million.
Investors will have a view of the SEC strategy to receive a sizeable disgorgement in the coming months. The remedies-related discovery period extends for 90 days, which will take proceedings into 2024.
Attorney Jeremy Hogan made an observation amid the speculation on whether XRP is or isn’t a security. Hogan said,
“[…] how rare is it that the SEC sues a company for selling an unregistered security and during the litigation the price of the security increases? Very rare. And that might be another indication that the security is… not a security.”
Ripple Remains Resolute in Battle Against the SEC
This week, Ripple CEO Brad Garlinghouse remained committed to standing strong against the SEC. Speaking at DC Fintech 2023, Garlinghouse said that Ripple would go all the way, even if it meant to the Supreme Court.
The Ripple CEO also said the SEC needs to consider its options carefully. Garlinghouse said an appeal would amplify a ruling in favor of Ripple. He also noted that going all the way to the Supreme Court would be a good think, saying,
“The current Supreme Court, we’d love to see the Vegas odds on how that would go. They have not been friendly to regulators.”
On Thursday, Garlinghouse spoke to CNBC in Dubai about the SEC v Ripple case. Garlinghouse targeted the SEC’s regulation by enforcement approach to the crypto space, saying,
“One of the definitions of insanity is doing the same thing over and over again and thinking you’ll get a different outcome. The SEC is doing the same thing over and over again and they think, I guess, they’re going to get a different outcome.”
Garlinghouse then referenced the Wednesday interview on stage at DC Fintech World 2023 and the Vegas odds before saying,
“The SEC, in my opinion, has lost sight of their mission to protect investors.”