- Bill Morgan questions the SEC’s claim that XRP investors suffered financial harm.
- Equitable remedy meant to compensate victims, not give the SEC a windfall.
- The SEC could suffer another defeat against Ripple in the remedies stage.
Renowned US Attorney Bill Morgan has raised questions regarding what evidence the SEC has before Judge Analisa Torres to support its claim that XRP institutional investors suffered financial harm. According to Morgan, that is the equitable remedy meant to compensate victims, not give the SEC or the government a windfall.
Morgan’s statement in support of comments by Moon Lambo, an XRP YouTuber, who posted that no XRP holders were harmed by Ripple despite the SEC’s argument. Lambo implied that this could mean another loss for the SEC, following comments by Ripple’s Chief Legal Officer, Stuart Alderoty, who noted that the Second Circuit in SEC v Govil held that the SEC cannot ask for a crippling disgorgement award without first proving that “investors” suffered actual financial harm.
The latest development attracted the attention of several attorneys, including Steven Neyaroff, the Inventor of Utility Token. Neyaroff noted that the SEC could make a case that investors suffered pecuniary harm as a result of fraud just not by Ripple but by the agency. According to him, an agency should be penalized if a court finds its actions arbitrary and capricious rather than a stern opinion stating such. He also noted that while immunity has its place, “qualified immunity” should be the standard if agency officials are found to have acted in malice.
Following the Govil decision, there are speculations that the SEC could suffer another defeat against Ripple in the remedies stage. During this stage, the SEC would need to prove that XRP holders lost money from the investment before Ripple can be held liable. That might be difficult for the SEC to achieve, as highlighted by Jeremy Hogan, another attorney, who noted that investors who bought Ripple below its current price have not been “damaged”.
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