Ripple is now required to produce terabytes of Slack messages to the SEC which were previously withheld due to an obvious data error.
U.S. Magistrate Judge Sarah Netburn has ordered Ripple to supply a million lacking Slack messages between workers which the Securities and Change Fee (SEC) has sought to access.
Regardless of Ripple’s protestations that complying would value as much as $1 million, the judge deemed the messages crucial and distinctive proof for the SEC’s ongoing case in opposition to the multi-billion dollar company for selling unregistered securities.
The SEC filed suit against Ripple Labs and its initial and current CEOs, Christian Larsen and Bradley Garlinghouse for selling XRP as unregistered security on December 20.
According to Law360, within the unique movement to compel Ripple from August 9, the SEC argued that the messages between Ripple workers had been “related to the events’ claims and defenses and proportional to the wants of the case.” It additionally stated that Ripple should deliver all messages from 22 email custodians in addition to the Slack messages:
Last month, the SEC told Judge Netburn that the Slack messages which Ripple produced seemed to be incomplete. Ripple initially denied this claim but revised its statement by claiming it was a data processing mistake which resulted in the firm only producing a small amount of the relevant messages, and that multiple million messages had been missing.
The SEC contended that Ripple’s failure to produce complete Slack records was “highly prejudicial” given these messages the SEC had obtained confirmed the remaining could be extremely related:
“These messages include: (a) discussions about Ripple’s desire to create speculative trading in XRP, (b) the effect of Ripple announcements and efforts on, and Ripple’s concerns as to, the price of XRP, the relationship and central importance of XRP sales to Ripple’s total business, and (d) the regulatory status of XRP.”
Ripple argued that it was unfair and unreasonable to produce the messages at a value of as much as $1M over many months. Judge Netburn responded that the fee to Ripple in producing the messages was outweighed by their significance to the case.
“Any burden to Ripple is outweighed by its earlier agreement to produce the relevant Slack messages, the relative resources of the parties, and the quantity in controversy,” Judge Netburn said.
“Any burden to Ripple is outweighed by its earlier settlement to produce the related Slack messages, the relative resources of the parties, and the quantity in controversy,” Judge Netburn said.