Ripple’s chief legal officer (CLO) Stuart Alderoty says the payments company is taking action in response to a court filing submitted by the U.S. Securities and Exchange Commission (SEC) last month.
In a Motion for Remedies and Entry of Final Judgment filed on March 25th, the SEC requested the US District Court for the Southern District of New York to order Ripple to pay $876,308,712 in disgorgement, $198,150,940 in prejudgment interest and $876,308,712 in civil penalty, for a total of around $1.95 billion.
The motion concerns a lawsuit that the SEC initially filed against Ripple in late 2020. The securities regulator accused the San Francisco-based company of selling the XRP crypto asset as an unregistered security.
While US District Judge Analisa Torres ruled that the automated, open-market sales of XRP did not constitute security offerings, she decided that the institutional sale of the token violated securities law.
The SEC says Ripple engaged in a years-long, nearly $1 billion, course of violations of the securities laws.
“Courts in this District routinely impose injunctive relief, disgorgement, prejudgment interest, and penalties on defendants that violate the securities laws.
The Court should do so here, given its finding that Ripple illegally raised hundreds of millions of dollars by engaging in unregistered offers and sales of securities over the course of many years.”
In a post on social media platform X, Alderoty says Ripple will respond to the regulator’s motion within a week.
“Seeing some confusion on next steps with the SEC vs. Ripple case. To clarify – Ripple will file its response to the SEC’s request for penalties by April 22 and the SEC has until May 6 to reply.”
Alderoty also corrects misinformation about a final pretrial conference on April 16th since the SEC already decided not to pursue claims against Ripple’s CEO Brad Garlinghouse and executive chairman Chris Larsen.
“There is no final pretrial conference because the SEC dismissed the charges against Brad Garlinghouse and Chris Larsen.”
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