A judge in New York has rejected a joint request from the US Securities and Exchange Commission (SEK) And Ripple Labs for her to approve a proposed settlement agreement that would cut Ripple’s civil penalty to $ 50 million and dissolve the fixed injunction against the company.
It is the proposed removal of the fixed injunction and not the civil penalty of $ 50 million – reduced from the original $ 125 million that was imposed by the court last year – it seems to be the adhesive point for district judge Analisa Torres in the southern district of New York (Sdny)In its Thursday, it wrote that a permanent injunction against further violations of federal securities was, as Sec hinted at the time, “justified because of the huge sums that Ripple did by violating the law and Ripple’s incentives to continue to do so.”
“In fact, if the court should not be concerned that Ripple is violating the law, why do the parties want to remove the injunction that tells Ripple, ‘Follow the Law’? ‘, Torres wrote. This has not changed, nor do the parties claim that it has done so. “
The request comes in the midst of sweeping changes at SEC after the election of US President Donald Trump in January and the subsequent departure of former SEC chairman Gary Gensler. According to SEC’s new management, the regulator has adopted a more cryptic regulatory attitude, creating a crypto-task force led by commissioner Hester Peirce and dropping a number of investigations and lawsuits against cryptic businesses. However, as Torres pointed out in her decision, most of these cases were dismissed by SEC “before a court found a violation of federal securities laws.”
“Regardless of management changes, SEC has avoided whipping between arguments in ongoing litigation to protect the credibility of the agency,” said Corey Fryer, director of investor protection in the Consumer Federation of America. “By providing advantage to cryptic companies, SEC leadership has chosen to stain a 90 -year reputation, which the agency carefully built.”
This is SEC’s second request for an indicative decision – essentially a preview of what a lower court will do if a higher court sends the case back to the lower right for a final decision – which Torres has rejected. In May, she slammed the first such attempt with reference to both jurisdiction and procedural deficiencies. Earlier this month, the parties tried again and submitted a new, extended request to the court that argued that “extraordinary circumstances” justified the change of Torres’ final judgment.
Torres was not entirely moved by SEC and Ripple’s arguments and wrote: “The court respects the parties’ freedom to be able to be necessary to prevent the party from violating the law again.
If the parties “really want to end this trial today,” wrote Torres, the other two have elections: They can either withdraw their ongoing appeals in the case or they can take an appeal.
“None of the possibilities involve demanding that this court release the ripple of its obligations under the law,” Torres said.
