Case 1:20-cv-10832-AT-SN Document 812 Filed 02/21/23 Page 1 of 5
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`February 21, 2023
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`VIA CM/ECF
`Hon. Analisa Torres
`United States District Court
`Southern District of New York
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`Re:
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`Dear Judge Torres:
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`Roslyn Layton, PhD, by and through the undersigned counsel, files this amended request1 for leave to
`intervene in this case to petition the Court for access to a set of internal SEC documents relating to a
`speech that former SEC Director of Corporation Finance William Hinman gave in June 2018 (the “Hinman
`Speech Documents”).2 On December 22, 2022, the SEC moved to seal some of the Hinman Speech
`Documents that Ripple offered in support of its summary judgment motion. See Dkt. No. 745 at 3 & n. 3.
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`SEC v. Ripple Labs, Inc., et al., No. 20-cv-10832 (AT) (SN) (S.D.N.Y.)
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`Dr. Layton opposes that motion. Dr. Layton, a columnist and regulatory policy scholar, is a visiting
`researcher at Aalborg University, an executive vice-president of Strand Consult, and a Senior Contributor
`to Forbes.com. Dr. Layton has no financial stake in Ripple or XRP, and no financial interest in this case.
`But she has written numerous articles about the Hinman Speech Documents.3 In those articles, she has
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`1 Dr. Layton’s original request suggested that the SEC had offered the Hinman Speech Documents in
`support of its own summary judgment motion, when that was not the case. Dr. Layton’s counsel
`apologizes for the error.
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` 2
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` Dr. Layton is entitled to raise this petition as a member of the press, which “has standing to intervene
`in actions to which it is otherwise not a party in order to petition for access to court proceedings and
`records.” Comm’r Ala. Dep’t of Corr. v. Advance Local Media, LLC, 918 F.3d 1161, 1170 (11th Cir.
`2019); see also In re Ionosphere Clubs, Inc., 156 B.R. 414, 431 (S.D.N.Y. 1993) (same). And Judge
`Kaplan recently granted members of the press leave to intervene through similar petitions in United
`States v. Bankman-Fried, No. 22-cr-00673-LAK. See Dkt. No. 57.
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` 3
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` See Roslyn Layton, Crypto Law Experts Suggest SEC Likely to Lose Key Case And Discredit Howey
`Test, Forbes, Oct. 30, 2022, http://bit.ly/3xdBSzP; Roslyn Layton, Gensler Says Crypto Treated Just
`Like the Market; 200 SEC Lawsuits Say Otherwise, Forbes, July 28, 2022, http://bit.ly/3jIZrO4; Roslyn
`Layton, The Crypto Uprising the SEC Didn’t See Coming, Forbes, Apr. 30, 2022, http://bit.ly/3Ywj777;
`Roslyn Layton, In the Ripple Case, the SEC Is Now on Trial—and Knows It, Forbes, Apr. 8, 2022,
`http://bit.ly/3YSKGY3; Roslyn Layton, SEC Stumbles in Ripple Case, Lost in a Maze of Its Own
`Making, Forbes, Mar. 11, 2021, http://bit.ly/3x4UQsu; Roslyn Layton, SEC v. Ripple: Mining for
`Clarity in Regulatory Chaos, Forbes, Feb. 10, 2021, http://bit.ly/3RIcVWI.
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`Case 1:20-cv-10832-AT-SN Document 812 Filed 02/21/23 Page 2 of 5
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`Hon. Analisa Torres
`February 21, 2023
`Page 2
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`examined the central role those documents play in this enormously significant case, which she has dubbed
`“the cryptocurrency trial of the century.”4 She therefore respectfully requests leave to intervene so she
`might ask the Court to release these documents to the public and to deny the SEC’s motion to keep them
`sealed.
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`ARGUMENT
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`Both the First Amendment and federal common law endow the press and the public with a “potent and
`fundamental presumptive right” to access “judicial documents,” Mirlis v. Greer, 952 F.3d 51, 58 (2d Cir.
`2020)—a right fundamentally rooted in the need for courts “to have a measure of accountability and for
`the public to have confidence in the administration of justice.” United States v. Amodeo, 71 F.3d 1044,
`1048 (2d Cir.1995). That right may not be absolute, and varies with the documents’ purpose in the
`litigation, but it generally compels the public release of judicial documents “absent the most compelling
`circumstances.” Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006). That right
`compels the public release of the Hinman Speech Documents, given the intense public interest in this case,
`the Hinman Speech Documents’ central place within it, and the absence of any legitimate countervailing
`interest counseling against disclosure.
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`A. The presumption favoring public release of the Hinman Speech Documents is particularly strong.
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`Ripple has made the Hinman Speech Documents “judicial documents” by “introducing them into
`evidence” in support of its summary judgment motion, thereby attesting to their importance in
`“determining” the parties’ “substantive rights.” Amodeo, 71 F.3d at 1049. And the case for public release
`of those documents is particularly strong. This case has garnered intense public and media attention5—
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`4 Roslyn Layton, SEC v. Ripple: The Cryptocurrency Trial of the Century, Forbes, Dec. 29, 2020,
`http://bit.ly/3JWD2HE.
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`5 For a small sampling of the articles that have been written on the case, see, e.g., The Editorial Board,
`The SEC’s Cryptocurrency Confusion, Wall St. J., Apr. 18, 2021, http://bit.ly/3YkVUo8; Nikhilesh De,
`Ripple Responds to SEC Lawsuit Over XRP Sales, CoinDesk, Jan. 29, 2021, http://bit.ly/3YDvOwg;
`Jody Godoy, XRP holders seek to intervene in SEC’s Ripple lawsuit, Reuters Legal, Mar. 15, 2021,
`https://bit.ly/3HNQSt8; J. W. Verret, The SEC Is Treating Ripple Like a Ponzi Schemer, Not a Shaper of
`Money’s Future, RealClear Markets, Oct. 27, 2022, http://bit.ly/3jEADqz; Hassan Tyler, SEC v. Ripple:
`Did the Government Fail to Prove Its Case?, ValueWalk, Jan. 19, 2023, http://bit.ly/3YiKcdx; Curt
`Levey, Latest Developments in SEC “Regulation” of Cryptocurrency, the Federalist Society Blog, Dec.
`10, 2022, http://bit.ly/3Iaqlrt; Brian Baxter & Justin Wise, Wall Street Veteran is the Face of Crypto in
`Ripple SEC Fight, Bloomberg Law, Dec. 6, 2022, http://bit.ly/3XmJieS; Malathi Nayak, Chris
`Dolmetsch & Allyson Versprille, Fight to Regulate Crypto at Crossroads as Ripple Ruling Looms,
`Bloomberg Law, Jan. 17, 2023, http://bit.ly/3HPzQet ; J.W. Verret, SEC Should follow Congress’
`Pragmatic Approach on Crypto, Law360, Jan. 6, 2022, https://www.law360.com/articles/1452661; J.W.
`Verret, SEC Should Drop Litigation Over Ripple’s XRP Token, Law360, May 5, 2021,
`https://www.law360.com/newyork/articles/1381836.
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`Case 1:20-cv-10832-AT-SN Document 812 Filed 02/21/23 Page 3 of 5
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`Hon. Analisa Torres
`February 21, 2023
`Page 3
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`with analysts calling it a critical “inflection point”6 for cryptocurrencies. And rightly so. The stakes are
`extraordinarily high, and not only for Ripple, its executives, and the thousands of XRP holders who have
`suffered billions in losses from the SEC’s misguided effort at supposedly protecting them. This case is
`also poised to determine the future of cryptocurrencies in this country, serving as a legal referendum on
`the SEC’s entire system of “regulation by enforcement” for the industry.7
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`That immense significance has translated into intense public scrutiny of Hinman’s speech, which, given
`the SEC’s refusal to provide explicit regulatory guidance on cryptocurrencies, constitutes the only
`instruction anyone within the SEC has offered crypto stakeholders to avoid the wrong end of an
`enforcement action. And the supposed guidance Hinman offered in that speech has proven inscrutable,
`declaring one crypto asset—Ethereum’s native cryptocurrency Ether—as completely outside the securities
`laws, while the SEC seeks billions in penalties from Ripple’s virtually identical offering for supposedly
`violating those laws. That inconsistency has given rise to grave concerns about potential conflicts of
`interest, because Hinman had a financial stake in promoting Ethereum to the exclusion of competing coins
`like XRP.8
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`Both Judge Netburn and this Court have recognized that the internal SEC deliberations memorialized in
`the Hinman Speech Documents could therefore prove crucial to the defense (see Dkt. Nos. 413, 465, 652),
`giving the documents a potentially critical role “in the exercise of the Article III judicial power.” Lugosh,
`435 F.3d at 119. Those documents have equally compelling “resultant value” to “those monitoring the
`federal courts”—and those evaluating the performance of public agencies and officials in those courts. Id.
`The Hinman Speech Documents will show whether Ethereum’s proponents within the SEC had undue
`inference in crafting Hinman’s message, or whether agency insiders thought the guidance provided in the
`speech was unclear or deviated too much from settled expectations. Public access will therefore be crucial
`in enabling the public to evaluate the strength of Ripple’s fair-notice defense—because if insiders within
`the SEC could not understand the speech’s guidance, others outside the agency could not hope to grasp it.
`And such access is likewise essential in helping the public evaluate whether the SEC’s entire “regulation
`by enforcement” approach to cryptocurrencies makes sense, whether its pursuit of Ripple is a legitimate
`use of public tax dollars, and whether the lines the SEC has drawn actually work. All this means there is
`a particularly strong presumption in favor of disclosing the Hinman Speech Documents.
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`B. There are no countervailing factors weighing against disclosure.
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`There is also no countervailing interest counseling against disclosure. There is no contention that the
`Hinman Speech Documents are sought for “such illegitimate purposes as to promote public scandal or
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`6 C. Smith-Bishop. A Ripple-Turned-Tidal Wave: SEC v. Ripple Labs as an Inflection Point in the
`Regulatory Approach to Innovation in Complex Systems, 44 Campbell L. Rev. 335 (2022).
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`7 See, e.g., Carol R. Goforth, Regulation by Enforcement: Problems with the SEC’s Approach to
`Cryptoasset Regulation, 82 Maryland L. Rev. 107 (2022); see also Smith-Bishop, supra at 388.
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`8 See Al Barbarino, SEC Asked to Probe Ex-Official's Crypto Statements, Law360, May 10, 2022,
`http://bit.ly/3YmO6SY.
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`Case 1:20-cv-10832-AT-SN Document 812 Filed 02/21/23 Page 4 of 5
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`Hon. Analisa Torres
`February 21, 2023
`Page 4
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`gain unfair commercial advantage.” Comm’r Ala. Dep’t of Corr., 918 F.3d at 1169. And the justifications
`the SEC has offered for maintaining the documents’ secrecy are unavailing.
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`The SEC’s contention that this Court has declared the documents irrelevant is both incorrect and beside
`the point. Dkt. No. 745 at 3. The Court determined that those documents could be relevant to the defense
`when it ordered the SEC to turn them over. Dkt. 652. The SEC declared the documents are relevant to
`“the summary judgment motions” when it offered them in support of its own summary judgment motion.
`Dkt. No. 745 at 3. And in any event, in determining whether the Hinman Speech Documents should be
`turned over to the public, the documents’ relevance to the parties is secondary to their relevance to the
`public—and on that score, their relevance is unquestioned.
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`The SEC fares no better by invoking its supposed interest in maintaining the confidentiality of its officials’
`“nonpublic deliberations” recorded in the Hinman Speech Documents—because the agency has no such
`interest. The Court has already correctly determined that the documents are not subject to the “deliberative
`process or attorney client privileges.” Dkt. No. 745 at 3. And while the agency claims it might try to
`reassert those privileges “on appeal in this litigation or other litigation” it has not actually tried to do so.
`Nor has it sought to stay the effect of those orders. And that is because it knows any further appeal will
`not succeed. Id.
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`And outside these privilege claims, the SEC enjoys no residuum of privacy or “confidential[ity]” that
`might prevent disclosure. Dkt. No. 745 at 3. On the contrary, in the Freedom of Information Act, 5 U.S.C.
`§ 553 et seq., Congress directed that internal agency communications should generally be subject to a
`“presumption in favor of disclosure.” Center for Constitutional Rights v. CIA, 765 F.3d 161, 166 (2d Cir.
`2014). Accordingly, except for a few limited privileged areas, Congress has instructed that agencies’
`internal deliberations should be made public, deeming the public interest in exposing those interactions to
`sunlight to be worth any risk to the deliberative process that might result.
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`Indeed, where, as here, the very legitimacy of agency action has been brought into question, “it is most
`important to have a measure of accountability and for the public to have confidence in the administration
`of justice.” United States v. Nejad, 521 F. Supp. 3d 438, 452 (S.D.N.Y. 2021). That is why the Second
`Circuit recently rejected the Department of Justice’s contention that the need “to protect the robust and
`candid functioning” of its “internal processes” and its “privacy concerns” should prevent disclosure of its
`internal communications. Gannett Media Corp. v. United States, No. 22-2160, 2022 WL 17818626, at *3-
`4 (2d Cir. Dec. 20, 2022). And the Court should reach the same result here. The fact that the Hinman
`Speech Documents concern communications among agency officials hardly diminishes the presumption
`in favor of disclosure, it only suggests the documents “are generally available,” making the presumption
`“stronger,” and compelling the conclusion that the documents should be released. Amodeo, 71 F.3d at
`1050.
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`For all these reasons, Roslyn Layton, PhD respectfully requests that the Court grant her leave to file a
`petition for intervention in this action, an opportunity to file a response to the SEC’s motion to seal on full
`briefing, and such other and further relief as justice requires. Ms. Layton also requests to be heard on these
`matters if the Court deems it appropriate.
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`Case 1:20-cv-10832-AT-SN Document 812 Filed 02/21/23 Page 5 of 5
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`Hon. Analisa Torres
`February 21, 2023
`Page 5
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`cc: All counsel of record via CM/ECF
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`Respectfully submitted,
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`J. Carl Cecere
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`Counsel for Roslyn Layton, PhD
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