Ripple’s chief legal officer, Stuart Alderoty, has expressed reservations about the recent string of legal defeats suffered by the U.S. Securities and Exchange Commission (SEC) during Gary Gensler’s tenure. These remarks follow another setback for the SEC in the Fifth Circuit court after Ripple’s victory in the XRP lawsuit in July 2023.
Stuart Alderoty of Ripple characterized this sequence of events as a “deeply concerning trend” in which the SEC, under the leadership of Chair Gary Gensler, appears to be straying from its commitment to upholding the law. Alderoty expressed concern about the SEC’s repeated arbitrary and capricious actions in court cases, suggesting a troubling pattern under Chair Gensler’s leadership.
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? https://t.co/5bUgSBUOI8
— Stuart Alderoty (@s_alderoty) November 1, 2023
The Fifth Circuit Court of Appeals in the United States deemed the SEC’s stock buyback disclosure rule as arbitrary and lacking reasonable explanation on Oct. 31. The court has provided an opportunity for the SEC to demonstrate a thorough consideration of pertinent matters and provide a good basis for its decision. This development follows the SEC’s recent defeats in the XRP lawsuit and the Grayscale filing, which could hold significance for the crypto industry’s regulatory future.
The legal action, initiated by multiple U.S. business and trade associations, revolves around an SEC regulation mandating issuers to report daily information on share repurchases every quarter and to provide the rationale behind repurchasing their own stock.
Judge Analisa Torres, on Oct. 25, 2023, issued an order officially dismissing charges against Ripple’s CEO Brad Garlinghouse and executive chairman Chris Larsen in the Ripple vs. U.S. SEC lawsuit. Furthermore, there have been developments regarding institutional sales of XRP. Judge Torres has requested a joint scheduling brief from both parties on this issue. The Summary Judgment on July 13, 2023, was a split verdict, favoring Ripple in the case of retail XRP token sales.