Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 1 of 15
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`SECURITIES AND EXCHANGE COMMISSION, :
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`Plaintiff, :
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`- against - :
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`RIPPLE LABS, INC., BRADLEY GARLINGHOUSE, :
`and CHRISTIAN A. LARSEN,
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`Defendants.
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`20 Civ. 10832 (AT) (SN)
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`ECF Case
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`PLAINTIFF SECURITIES AND EXCHANGE COMMISSION’S
`REPLY MEMORANDUM OF LAW IN FURTHER OPPOSITION TO THE
`MOTION TO INTERVENE
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`Jorge G. Tenreiro
`Dugan Bliss
`Robert Moye
`Benjamin Hanauer
`Mark Sylvester
`Daphna A. Waxman
`Jon A. Daniels
`Ladan F. Stewart
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`Attorneys for Plaintiff
`SECURITIES AND EXCHANGE
`COMMISSION
`New York Regional Office
`200 Vesey Street, Suite 400
`New York, New York 10281
`(212) 336-0153 (Stewart)
`steawrtla@sec.gov
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`May 17, 2021
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 2 of 15
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES ................................................................................................... ii
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`PRELIMINARY STATEMENT .............................................................................................. 1
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`LEGAL STANDARD ................................................................................................................ 2
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`ARGUMENT ............................................................................................................................ 4
`I.
`Movants Can Offer Nothing Beyond What Defendants Can Provide and Have
`Provided the Court ........................................................................................................................ 5
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`Movants Are Too Partial to Serve as Amici .............................................................................. 7
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`II.
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`III. Movants’ Participation as “Elevated Amici” Who Are Exempt from Discovery
`Prejudices the SEC ........................................................................................................................ 8
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`IV. Movants Inappropriately Seek to Expand the Issues in this Case ......................................... 9
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`CONCLUSION ....................................................................................................................... 10
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 3 of 15
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`TABLE OF AUTHORITIES
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`Page(s)
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`Cases
`Am. Bird Conservancy v. Harvey,
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`232 F. Supp. 3d 292 (E.D.N.Y. 2017) ...................................................................................................... 5
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`Andersen v. Leavitt, No. 03 Civ. 6115,
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`2007 WL 2343672 (E.D.N.Y. Aug 13, 2007) .......................................................................................... 3
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`Hartford Fire Ins. Co. v. Expeditors Int’l of Wash. Inc.,
` No. 10 Civ. 5643 (KBF), 2012 WL 6200958 (S.D.N.Y. Dec. 11, 2012) ..................................... 3-4, 6
`
`In re N.Y. City Policing During Summer 2020 Demonstrations,
` No. 20 Civ. 8924 (CM), 2021 WL 1669784 (S.D.N.Y. Apr. 28, 2021) ............................................... 4
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`Jamaica Hosp. Med. Ctr., Inc. v. United Health Gp., Inc.,
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`584 F. Supp. 2d 489, 497 (E.D.N.Y. 2008) ............................................................................................. 2
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`Jin v. Ministry of State Security,
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`557 F. Supp. 2d 131 (D.D.C. 2008) .......................................................................................................... 7
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`Lehman XS Trust, Series 2006-GP2 v. Greenpoint Mortg. Funding, Inc.,
` No. 12 Civ. 7935, 2014 WL 265784 (S.D.N.Y. Jan. 23, 2014) ......................................................... 3, 5
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`Long Island Soundkeeper Fund, Inc. v. New York Athletic Club,
` No. 94 Civ. 0436, 1995 WL 358777 (S.D.N.Y. June 14, 1995) ........................................................ 3, 7
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`New York v. U.S. Immigration and Customs Enforcement,
` No. 19 Civ. 8876 (JSR), 2019 WL 7816835 (S.D.N.Y. Dec. 17, 2019) ............................................... 4
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`Portland Pipe Line Corp. v. City of South Portland,
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`15 Civ. 54 (JAW), 2017 WL 79948 (D. Me. Jan. 9, 2017) ..................................................................... 9
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`Russell v. Board of Plumbing Examiners of Cty. of Westchester,
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`74 F. Supp. 2d 349 (S.D.N.Y. 1999) .............................................................................................. 7, 8, 10
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`Ryan v. Commodity Futures Trading Comm’n,
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`125 F.3d 1062 (7th Cir. 1997) ............................................................................................................... 3, 7
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`SEC v. Bear, Stearns & Co., Inc.,
` No. 03 Civ. 2937, 2003 WL 22000340 (S.D.N.Y. Aug. 25, 2003) ................................................... 3, 7
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`SEC v. W.J. Howey Co.,
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`328 U.S. 293 (1946) ................................................................................................................................... 10
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`ii
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`Strasser v. Doorley,
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`432 F.2d 567 (1st Cir. 1970) ...................................................................................................................... 8
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`United States v. Ahmed,
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`788 F. Supp. 196, 198 n.1 (S.D.N.Y. 1992) ............................................................................................. 5
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`United States v. El–Gabrowny,
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`844 F. Supp. 955 (S.D.N.Y. 1994) ............................................................................................................ 2
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`United States v. Gotti,
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`755 F. Supp. 1157 (E.D.N.Y. 1991) ................................................................................................ 2, 3, 6
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`Waste Mgmt. of Penn., Inc. v. City of York,
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`162 F.R.D. 34 (M.D. Pa. 1995) ............................................................................................................. 2-3
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`Weininger v. Castro,
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`462 F. Supp. 2d 457 (S.D.N.Y. 2006)....................................................................................................... 7
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`Women for America First v. De Blasio,
` No. 20 Civ. 5746 (LGS), 2020 WL 4904057 (S.D.N.Y. Aug. 18, 2020) ......................................... 2, 3
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`Statutes
`15 U.S.C. § 77e ................................................................................................................................................. 10
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`15 U.S.C. § 78u(g) .............................................................................................................................................. 4
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`Rules
`Fed. R. Civ. P. 24 ........................................................................................................................................... 1, 4
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`iii
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 5 of 15
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`Plaintiff Securities and Exchange Commission (“SEC”) respectfully submits this
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`memorandum of law (pursuant to the Court’s Scheduling Order (D.E. 89 ¶ 4)) in reply to
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`Defendants Ripple Labs, Inc. (“Ripple”), Christian A. Larsen, and Bradley Garlinghouse’s response
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`(“Defendants’ Response,” D.E. 152) to the motion to intervene (the “Motion,” D.E. 122) filed by
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`Jordan Deaton, James Lamonte, Tyler Lamonte, Mya Lamonte, Mitchell McKenna, and Kristiana
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`Warner (collectively, “Movants”). For the reasons set forth below and in the SEC’s opposition brief
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`(“SEC Opposition,” D.E. 153), the Motion should be denied.
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`PRELIMINARY STATEMENT
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`Movants are six purported investors in the digital asset XRP who seek to intervene on behalf
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`of “all similarly situated XRP holders” in the SEC’s enforcement action against Ripple—the issuer
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`of XRP—and Ripple’s current and former chief executive officers. The SEC has opposed Movants’
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`attempt to improperly inject themselves into this action. Defendants seem to agree with the SEC
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`that Movants should not be permitted to intervene under Federal Rule of Civil Procedure 24 (“Rule
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`24”) and instead propose that Movants participate in this action as amici curiae—a request that
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`Movants themselves have not made, and one that should be rejected by the Court.
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`As described in the SEC Opposition, Movants cannot offer any unique perspective or
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`information that is not already available to the Court, either in the public record or through the
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`presentation of Defendants’ able counsel. Nor are Movants impartial, objective participants seeking
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`to aid the Court. Rather, they have wholly adopted Defendants’ litigation positions and advocate for
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`the same outcome as Defendants. Seeking to inject themselves as “third-party defendants” in this
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`action, Movants would act as “friends” of Defendants, not true “friends of the court,” if permitted
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`to participate as amici. And Movants’ arguments are not relevant to (and would improperly expand)
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`the violations charged by the SEC in this action.
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 6 of 15
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`But Defendants’ Response makes clear that their proposal should be denied for an additional
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`reason: their proposal would unduly prejudice the SEC by allowing Movants to present one-sided
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`evidence without allowing the SEC to take related discovery. Defendants argue that Movants
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`should be allowed to participate in this enforcement action “including [with] the right to present
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`argument and proffer evidentiary material based on their experience and knowledge of the market”
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`(Defs.’ Response at 14), but that Movants’ participation “should not involve any ‘additional
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`discovery’ nor ‘any change to the current scheduling order’” (id. at 15 (quoting D.E. 123 at 14)).
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`Defendants cannot have it both ways. Movants cannot be allowed to present “evidentiary material”
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`to the Court—which would impermissibly transform the nature of this case—but deny the SEC the
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`right to discovery as to that purported evidence. For this reason, too, Defendants’ attempt to
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`present one-sided and untested “evidentiary material” from their supporters under the guise of a
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`“friend of the court” should be rejected.
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`LEGAL STANDARD
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`“There is no governing standard, rule or statute prescribing the procedure for obtaining
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`leave to file an amicus brief in the district court.” Women for America First v. De Blasio, No. 20 Civ.
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`5746 (LGS), 2020 WL 4904057, at *2 (S.D.N.Y. Aug. 18, 2020) (internal quotations and citations
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`omitted). The decision to grant leave to file an amicus brief is in a district court’s sound discretion.
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`Jamaica Hosp. Med. Ctr., Inc. v. United Health Gp., Inc., 584 F. Supp. 2d 489, 497 (E.D.N.Y. 2008).
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`“The usual rationale for amicus curiae submissions is that they are of aid to the court and offer
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`insights not available from the parties.” United States v. El–Gabrowny, 844 F. Supp. 955, 957 n.1
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`(S.D.N.Y. 1994) (citing United States v. Gotti, 755 F. Supp. 1157, 1158-59 (E.D.N.Y. 1991)).
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`However, “[t]he named parties should always remain in control, with the amicus merely responding
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`to the issues presented by the parties. An amicus cannot initiate, create, extend, or enlarge issues.”
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`Waste Mgmt. of Penn., Inc. v. City of York, 162 F.R.D. 34, 36 (M.D. Pa. 1995) (internal quotations
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`2
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 7 of 15
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`omitted); Andersen v. Leavitt, No. 03 Civ. 6115, 2007 WL 2343672, at *2 (E.D.N.Y. Aug 13, 2007)
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`(“[A]n amicus curiae brief should not be used to address wholly new issues not raised by the parties.”
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`(internal quotation marks and citation omitted)); see also Lehman XS Trust, Series 2006-GP2 v.
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`Greenpoint Mortg. Funding, Inc., No. 12 Civ. 7935, 2014 WL 265784, at *1–2 (S.D.N.Y. Jan. 23, 2014)
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`(adopting this approach).
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`These considerations are particularly important in an SEC action, where courts are skeptical
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`of attempts by third parties to embroil themselves in the litigation. See, e.g., SEC v. Bear, Stearns &
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`Co., Inc., No. 03 Civ. 2937, 2003 WL 22000340, at *2, 6 (S.D.N.Y. Aug. 25, 2003) (refusing both
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`requests to intervene and to act as amicus curiae when the proposed amici were not “objective, neutral,
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`dispassionate ‘friend[s] of the court,’” because “[c]onferring amicus status on such partisan interests is
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`inappropriate” (citing Long Island Soundkeeper Fund, Inc. v. New York Athletic Club, No. 94 Civ. 0436,
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`1995 WL 358777, at *1 (S.D.N.Y. June 14, 1995)); see also Gotti, 755 F. Supp. at 1159 (denying
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`motion to file amicus brief where movant was advocate for defendant and would not provide court
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`with objective, dispassionate discussion of the issues). As the Seventh Circuit has noted:
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`The term “amicus curiae” means friend of the court, not friend of a party
`…. An amicus brief should normally be allowed when a party is not
`represented competently or is not represented at all, when the amicus
`has an interest in some other case that may be affected by the decision
`in the present case…or when the amicus has unique information or
`perspective that can help the court beyond the help that the lawyers
`for the parties are able to provide. Otherwise, leave to file an amicus
`curiae brief should be denied.
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`Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1063 (7th Cir. 1997) (Posner, C.J., in
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`chambers) (citations omitted); see also Women for America First, 2020 WL 4904057, at *3 (denying
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`amicus status when movant did not possess unique information that would assist the court, and the
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`parties were represented by competent counsel); Hartford Fire Ins. Co. v. Expeditors Int’l of Wash. Inc.,
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`No. 10 Civ. 5643 (KBF), 2012 WL 6200958, at *1 n.1 (S.D.N.Y. Dec. 11, 2012) (denying amicus
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`status when facts demonstrate movant was “more a ‘friend of [a party] rather than a ‘friend of the
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`3
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 8 of 15
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`court’”); New York v. U.S. Immigration and Customs Enforcement, No. 19 Civ. 8876 (JSR), 2019 WL
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`7816835, at *1 (S.D.N.Y. Dec. 17, 2019) (denying amicus status where submission “would not be ‘of
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`aid to the court [nor] offer insights not available from the parties’” (citation omitted)); In re N.Y. City
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`Policing During Summer 2020 Demonstrations, No. 20 Civ. 8924 (CM), 2021 WL 1669784, at *1
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`(S.D.N.Y. Apr. 28, 2021) (same).
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`ARGUMENT
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`The SEC Opposition addressed the reasons Movants should not be allowed to intervene in
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`the SEC’s enforcement action. In brief, Supreme Court precedent dictates that this type of
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`interference with government enforcement actions would impermissibly intrude on Executive
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`Branch prosecutorial discretion, while the doctrine of sovereign immunity and Section 21(g) of the
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`Securities Exchange Act of 1934, 15 U.S.C. § 78u(g), bar any claims by Movants against the SEC.
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`Nor is intervention proper under Rule 24 because Movants have not demonstrated a cognizable
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`interest in this action, and any interests Movants may have are adequately represented by Defendants.
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`Finally, permitting Movants to intervene would sow chaos into this litigation by, for example,
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`opening the door to intervention by other XRP investors who believe Defendants offered and sold
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`XRP as a security and have already brought class actions against Ripple.
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`Defendants agree with the SEC that Movants should not be permitted to intervene “as full
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`parties” or as a class. (Defs.’ Response at 2, 12.) Defendants’ suggestion that Movants be admitted
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`instead as amici curiae or as amici “with elevated participatory rights” should be rejected for four
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`additional reasons. Id. First, Movants have merely recycled factual and legal arguments made by the
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`four law firms ably representing Defendants and have offered no new evidence or unique
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`perspective that would render amicus participation appropriate. Second, Movants are unable to serve
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`as disinterested friends of the court, as they claim to be “unnamed defendants” in this matter and
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`their counsel has made inflammatory public statements attacking the SEC and its staff. Third,
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 9 of 15
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`Defendants’ request that the Court allow Movants to “present argument and proffer evidentiary
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`material,” while remaining immune from discovery, is self-serving, prejudices the SEC, and
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`contradicts the purpose of amici participation. Finally, Movants’ participation as amici would
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`inappropriately extend and enlarge the issues in this enforcement action.
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`I.
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`Movants Can Offer Nothing Beyond What Defendants Can Provide and
`Have Provided the Court.
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`Participation as amicus curiae “may be desirable where the amicus curiae possesses ‘unique
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`perspective that can help the court beyond the help the lawyers for the parties are able to provide.’”
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`Am. Bird Conservancy v. Harvey, 232 F. Supp. 3d 292, 299 (E.D.N.Y. 2017) (internal citations omitted).
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`In contrast, where a party is represented by “competent counsel that has given as good as it gets,”
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`courts deny amici participation. Lehman XS Trust, 2014 WL 265784, at *2; see also United States v.
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`Ahmed, 788 F. Supp. 196, 198 n.1 (S.D.N.Y. 1992) (denying movant’s request for amicus status on the
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`grounds that “the defendant’s interests were adequately represented by his counsel”).
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`Here, Defendants argue that Movants should be granted amicus status, yet concede that
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`Defendants are already litigating the very question Movants focus on—“the present status of XRP
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`as a security”—in addition to XRP’s “past status.” (Defs.’ Response at 2.) Indeed, as outlined in the
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`SEC Opposition, Defendants have taken the position that the current status of XRP is “the most
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`consequential and overarching issue” in this litigation (SEC Opp. at 9 (citing Ripple’s Amended
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`Answer (D.E. 51) ¶ 16)) and that this lawsuit has done “tremendous harm to XRP holders around
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`the world” (SEC Opp. at 19 (citing Tr. of Apr. 30, 2021 Hrg.)).
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`Defendants suggest that Movants can offer evidence on three “key premises” of this action:
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`the existence of a secondary market in XRP, the purported “use” for XRP, and the connection (or,
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`as Ripple would have it, lack thereof) between Ripple’s efforts and the success or failure of XRP.
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`But Defendants have already put forth arguments on these points, as outlined in the SEC
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`Opposition. (SEC Opp. at 8–9.) In its Answer, for example, Ripple has made arguments about the
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`5
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 10 of 15
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`existence of a secondary market in XRP (D.E. 51 at ¶¶ 2, 5), the supposed “use” for XRP (id. ¶¶ 1,
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`2, 4), and the supposed lack of correlation between Ripple’s efforts and the success or failure of
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`XRP (id. ¶¶ 9–10). Indeed, Defendants, who are represented by four capable law firms, do not and
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`cannot claim that they are unable to provide evidence about the secondary trading market for XRP
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`or any other issue without Movants’ participation in this lawsuit as amici. Defendants have already
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`cited, in their opposition to the SEC’s motion to strike, one of the documents Movants presented to
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`the Court. (D.E. 172 at 7 n.3.)1 Nor do Movants introduce any unique legal arguments; instead,
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`their filings merely reiterate Defendants’ positions. (See SEC Opp. at 14–15.) Tellingly, Movants
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`concede that they “do not seek additional discovery or any change to the current scheduling order.”
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`(D.E. 123 at 14.)
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`As such, this Court would not be assisted by amicus participation by Movants. See Gotti, 755
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`F. Supp. at 1158 (in denying a motion for leave to file an amicus brief, the court was “troubled by the
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`fact that a comparison of the memorandum of law submitted by the defendants and the
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`memorandum proposed to be submitted by the [movant] reveals that the [movant] cites no
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`significant case not cited or discussed by the defendants” and found that the “proposed [amicus]
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`brief would not, therefore, assist the court in the least”); Hartford Fire Ins., 2012 WL 6200958, at *1
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`n.1 (denying request to participate as amicus in part because proposed amicus “has set forth the same
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`bases as [a party] in support of” a substantive motion).
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`1 Movants do not appear to possess any reliable information that is unavailable to Defendants. To the contrary,
`Movants submit unreliable, redacted Twitter posts about the purported uses for XRP (D.E. 124-9, 124-10), and rely on
`videos, blogs, or articles collected from the Internet (e.g., D.E. 124-2, 124-8 (YouTube videos); D.E. 124-4, 124-7, 124-
`14–124-17, 124-20, 124-21 (news articles); D.E. 124-11–124-13, 124-18 (websites)). Defendants are more than capable
`of presenting these materials if needed and in fact have already done so—another one of Movants’ exhibits (D.E. 124-3)
`is a copy of the same speech that has wallpapered Defendants’ filings in this case. (D.E. 114-10 (Exhibit J to
`Garlinghouse motion to dismiss); see also D.E. 51 (Ripple’s Answer) at 98 n.5; D.E. 67 (Ripple motion to compel) at 2
`n.1; D.E 106 (Larsen motion to dismiss) at 10, 16); D.E. 111 (Garlinghouse motion to dismiss) at 7 n.3).) And, of
`course, Defendants are free to rely on affidavits or other testimonial evidence from investors like Movants to support
`their arguments—though Defendants have not named in their initial disclosures, or noticed the depositions of, any of the
`Movants or similarly-situated investors whom Defendants now claim could provide valuable insight to the Court.
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`6
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 11 of 15
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`II. Movants Are Too Partial to Serve as Amici.
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`Movants’ extreme partiality also bars them from participating as amici in this case. See Long
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`Island Soundkeeper Fund, Inc., 1995 WL 358777, at *1 (denying motion for leave to appear as amicus
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`where the applicant “appears to have its own particular interests in the outcome of the litigation”).
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`While courts recognize that amici are not required to be completely impartial, “there are, or at least
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`there should be, limits.” Weininger v. Castro, 462 F. Supp. 2d 457, 473 n.12 (S.D.N.Y. 2006) (citing
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`Ryan, 125 F.3d at 1063). Thus, an “amicus cannot assume a fully adversarial position, and is
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`precluded from engaging in adversarial activities.” Russell v. Board of Plumbing Examiners of Cty. of
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`Westchester, 74 F. Supp. 2d 349, 351 (S.D.N.Y. 1999); see also Jin v. Ministry of State Security, 557 F.
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`Supp. 2d 131, 136 (D.D.C. 2008) (“[T]he court does consider the presence of partiality with regard
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`to an amici’s admittance.”); Bear Stearns, 2003 WL 22000340, at *2, 6 (refusing both requests to
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`intervene and to act as amicus curiae and noting that none of the proposed amici was an “objective,
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`neutral, dispassionate ‘friend of the court,’” and that “[c]onferring amicus status on such partisan
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`interests is inappropriate” (citing Long Island Soundkeeper Fund, Inc., 1995 WL 358777, at *1).
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`Here, far from being dispassionate friends of the court, Movants wholly adopt Defendants’
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`arguments, positions, and desired outcomes, as discussed above and in the SEC Opposition.
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`Moreover, Movants are expressly antagonistic toward the SEC, positioning themselves as “unnamed
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`defendants” in this action and informing the Court that they intend to “file a class action lawsuit
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`against the SEC seeking damages for the SEC’s intentional misconduct and/or gross negligence and
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`gross abuse of discretion related to its allegations and claims regarding the Digital Asset XRP.”
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`(DE. 66 at 1–2.) And Movants’ counsel uses profanity and references physical violence in publicly
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`attacking the SEC and its staff. (SEC Opp. at 5, n.2.) In fact, Movants’ counsel has “pinned” a
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`March 4, 2021 tweet to his Twitter account asking for names of individuals interested in signing up
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`for a class action lawsuit against the SEC and is encouraging individuals to sign a petition to request
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`7
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 12 of 15
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`“an investigation” into the supposed “conflicts of interest” of individuals who worked at the SEC
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`when this case was filed, noting the need to “stand up against Injustice and Tyranny.” See Exs. A–C,
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`attached to the accompanying Declaration of Ladan F. Stewart, dated May 17, 2021.
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`Because Movants are not seeking to appear as objective “friends of the court,” but rather to
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`advance their own interests—to pursue claims against the SEC—Defendants’ request that Movants
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`appear as amici should be denied.
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`III. Movants’ Participation as “Elevated Amici” Who Are Exempt from Discovery
`Prejudices the SEC.
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`Defendants request that Movants, as “elevated amici,” be given the “right to present
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`argument and proffer evidentiary material based on their experience and knowledge of the market.”
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`(Defs.’ Response at 14.) This position is inconsistent with the purpose of amici, as “[p]articipation as
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`amicus curiae…is appropriate when the party cares only about the legal principles of the case.” Russell,
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`74 F. Supp. 2d at 351 (emphasis added). Indeed, “an amicus who argues facts should rarely be
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`welcomed.” Strasser v. Doorley, 432 F.2d 567, 569 (1st Cir. 1970).
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`Moreover, despite inviting the improper participation of an amicus to present evidence,
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`Defendants simultaneously maintain that Movants’ participation “should not involve any ‘additional
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`discovery’ nor ‘change any current scheduling order.’” (Defs.’ Response at 15.) Defendants’ request
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`is highly prejudicial to the SEC and reveals the true impetus behind their Response—to attempt to
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`back-door an incomplete and unreliable evidentiary record to the Court. Tellingly, in their initial
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`disclosures, Defendants did not notify the SEC of their intent to present evidence relating to even a
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`single XRP holder, purchaser, “user,” or investor in the secondary market. Had they done so, the
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`SEC could have conducted appropriate discovery. Now, with little time left in the discovery period,
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`Defendants ask this Court to accept at face value Movants’ purported (and plainly unreliable)
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`evidence, while denying the SEC the ability to engage in discovery in order to test Movants’
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`assertions. Movants’ extensive evidentiary submissions in support of their Motion—consisting of
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 13 of 15
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`hundreds of pages across more than 20 exhibits (some containing hearsay messages from dozens of
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`individuals)2—demonstrate the impropriety of Defendants’ request that Movants be allowed to
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`present unrebutted, untested, and inherently unreliable evidence to the Court. (See generally D.E.
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`124-1–124-21.)
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`Defendants seek to use amici to make “an end run around” the Court’s “discovery
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`restrictions” and the “rules of evidence.” Portland Pipe Line Corp. v. City of South Portland, 15 Civ. 54
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`(JAW), 2017 WL 79948, at *5–6 (D. Me. Jan. 9, 2017) (holding that a party was “right to be
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`concerned about whether the amici will infuse external facts” and that the court should not allow
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`facts asserted by amici to affect a decision). This attempt to present evidence to the Court that
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`Defendants deem favorable to them, while denying the SEC the ability to test that evidence, should
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`be flatly rejected.
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`Should the Court allow Movants to participate as amici with the ability to present evidence,
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`the SEC respectfully requests a simultaneous order extending the discovery deadlines by four
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`months to allow the SEC to depose Movants and conduct discovery with respect to any “evidentiary
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`material” that Movants may wish to present to the Court. The SEC further respectfully requests an
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`order bringing Movants within the scope of the Protective Order entered in this case so that the
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`SEC may share the evidentiary record with Movants.
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`2 For example, Movants’ Exhibit I consists of at least 15 emails from individuals whose names have mostly been
`redacted (though one purports to be from the “SEC” (D.E. 124-9 at 18)), and appearing at times as emails copied and
`pasted together (id. at 2–3). Some of these individuals explain that they “invested all [their] savings from 2020” in XRP
`and have “reinvested in XRP recently” (id. at 5); another explains that he similarly put his “life saving[s]” in XRP (id. at
`10); and yet another explains his concern that his “XRP investment took a nose dive along with” another digital asset (id.
`at 16). Still another email is from an investor who says she has “no interest or shares in Ripple” (presumably to rebut
`any assertion that XRP is Ripple “stock,” which is not an argument any party is making), but that she instead only has an
`“XRP investment” (which is an argument the SEC is making). (Id. at 12.) Similarly, Movants’ Exhibit J consists of series
`of tweets from users whose names have been redacted from the top but not the bottom of the exhibit. (D.E. 124-10.)
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 14 of 15
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`IV. Movants Inappropriately Seek to Expand the Issues in this Case.
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`Participation by Movants as amici should be denied for the additional reason that it would
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`expand the scope of this enforcement action beyond claims the SEC has, in its discretion, chosen to
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`bring. An “amicus cannot raise or implicate new issues that have not been presented by the parties.”
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`Russell, 74 F. Supp. at 351. But that is exactly what Movants attempt to do here.
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`As discussed in the SEC Opposition, the Amended Complaint alleges that Ripple, the issuer
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`of XRP, and its two CEOs unlawfully offered and sold XRP without registering these offers and
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`sales with the SEC, in violation of Section 5 of the Securities Act of 1933, 15 U.S.C. §§ 77e(a), (c).
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`The main dispute is whether these specific offers and sales constitute offers and sales of “investment
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`contracts” and therefore “securities” under the standard set forth in SEC v. W.J. Howey Co., 328 U.S.
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`293 (1946). Defendants state that they have “no relationship” with Movants and that Movants are
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`interested in “offers and sales by other parties unrelated to Ripple.” (Defs.’ Response at 6.) As this
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`enforcement action does not charge any individual investors in the secondary market who purchased
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`XRP, Movants’ participation in this case—whether as intervenors or as amici—would expand the
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`scope of this case to claims the SEC is not bringing. (See SEC Opp. at 23–26.)
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`CONCLUSION
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`For the foregoing reasons, the Court should deny the Motion to Intervene and deny
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`Defendants’ request that Movants participate as amici in this action.
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`Case 1:20-cv-10832-AT-SN Document 189 Filed 05/17/21 Page 15 of 15
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`Dated: New York, New York
`May 17, 2021
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`/s Jorge Gerardo Tenreiro_______________
`Jorge G. Tenreiro
`Dugan Bliss
`Robert Moye
`Benjamin Hanauer
`Mark Sylvester
`Daphna A. Waxman
`Jon A. Daniels
`Ladan F. Stewart
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`Attorneys for Plaintiff
`SECURITIES AND EXCHANGE
`COMMISSION
`New York Regional Office
`200 Vesey Street, Suite 400
`New York, New York 10281
`(212) 336-0153 (Stewart)
`stewartla@sec.gov
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