By wanting to have it both ways, the SEC has inadvertently put the Hinman speech back into play as “market guidance”, which puts it back into relevance as official guidance as to whether XRP is a security and back into play as to the fair notice defence.
The SEC v. Ripple hearing this week, which saw Judge Sarah Netburn showing an increased lack of patience toward the SEC’s “inconsistent positions” over Hinman’s speech, has led to widespread commentary among the members of the public.
Among these is Jeremy Hogan, an Orlando-based attorney that has been regularly presenting his views on the XRP lawsuit and, once again, offered his analysis of the conference in a video shared on Youtube.
“That hearing didn’t go well for the SEC. We used to call those ‘suicide mission hearings’ because you were being sent to your death but it was actually much worse for the SEC than you may even imagine as some major errors were made today by them”.
A summary of the hearing can be found here.
The SEC is desperately trying not to handle the infamous Hinman emails over to Ripple, said Hogan, who added the plaintiff has already lost in the deliberative process privilege argument previously and now it is raising the attorney-client privilege argument.
However, changing positions on who or what the clients here were is definitely a problem for the SEC, as attorney Thien-Vu Hogan has pointed out in a previous analysis.
The issue with the SEC’s claim is that the plaintiff will struggle to explain who the client is as the agency has taken no less than 3 positions on whose opinion the speech was: first it was the SEC’s opinion, then it later became Hinman’s personal opinion, and now it is the division’s opinion.
That’s exactly what happened at the hearing. Judge Netburn asked the SEC counsel to “help [her] understand what legal advice Director Hinman received and for what purpose it was given. What was the legal advice for? What was he seeking that advice for?”
Another sharp question was “do you still stand by that position today that Hinman’s speech was his personal opinion?”
The Judge seemed unconvinced by the SEC’s answers and “twisted the knife a little bit more” by letting the plaintiff know that the SEC’s distancing from the speech is problematic because there must be a purpose for the SEC lawyers to give legal advice. “And if this is his personal opinion, then there’s no purpose for the legal advice.”
Jeremy Hogan then commented on the SEC’s strategy calling it a “mistake” for changing its position. “You have to stick with that.”
By wanting to have it both ways, the SEC has inadvertently put the Hinman speech back into play as “market guidance”, which puts it back into relevance as official guidance as to whether XRP is a security and back into play as to the fair notice defence.
“And in trying to win a loser, the SEC might just have lost a winner”, Mr. Hogan concluded.
