SEC vs. Ripple_ Lawyer Jeremy Hogan discusses good news, bad news and more.

Hello all and welcome to Legal Briefs, or should we just change the channel name to Ripple Briefs, which is all we talk about in 2021, and also describes that wonderful feeling of standing on a balcony in boxers as the wind gently caresses you. Guys know what I'm talking about, Ripple Briefs. In any case, as you may know already, the XRP holder's very own attorney, John Deaton, was invited to talk about the SEC vs Ripple case on Fox News yesterday, and he was absolutely amazing. It's absurdity, he said, and thus a national star was born. But John Deaton didn't let fame go to his head, no. Ever humble attorney John Deaton just took a little vacation, shaved the goatee, and went right back to work. It's true, it's his heme, backed by popular demand and certain outdated extradition laws. The gringo who put the F back in siesta, the man to whom Speedy Gonzalez once said, whoa dude, slow down. No, it's not a stretch. Welcome back, and if John Deaton can just say yippee-ki-yay, motherf**kers, in an interview one day, my life will be complete. Okay, so today I'm here to give you some good news and a tease of bad news in the Ripple vs SEC case. Yes, as the supreme being of this YouTube channel, I have declared that the SEC is now on trial, and so I will heretofore title the action Ripple vs SEC, and in the case last week, Ripple filed its brief in response to the SEC's request that it not have to produce about 35 internal documents, and boy was this brief a doozy, and in 10 minutes you are going to understand the legal arguments going on, why this brief was so good, and the one document that could change everything, and of course the brief was good because it was drafted and filed by none other than Brad Garlinghouse's lawyer Matthew Solomon, who I haven't seen do anything less than amazing so far, and I'm not alone in that opinion. The Advisor Al channel on YouTube apparently agrees with me. Today I got a chance to listen to the hearing of Ripple and SEC about the deliberative process. Believe you me, Ripple attorney Matt Solomon laid it down like the law man, like the universal lawyer, the universal lawyer. I'm talking about the universal lawyer, Matt Solomon. He is the universal lawyer. Solomon is the universe's lawyer. I'm glad the universe has counsel. We sure do need it. In any case, the legal issue we are discussing today is whether the SEC has to turn over about 35 internal documents related to Bitcoin, Ether, XRP. These documents and one in particular could be exculpatory, which is a fancy word for smoking gun, but the SEC of course doesn't want to turn them over and it is relying on the deliberative process privilege, DPP for the most part, in denying them to Ripple. So Ripple filed its brief arguing why the privilege doesn't apply, and the brief really was brilliant, and let me show you why. A good lawyer does not assume anything. That's something I learned from my dad. Instead, a good lawyer starts with basic assumptions and tears them down. That's why lawyers' cross-examinations can be so tedious. Here's an actual question at a deposition, which kind of shows you how this goes. Question, I show you exhibit three and ask you if you recognize that picture. Answer, that's me. Question, were you present when that picture was taken? So yes, those types of questions make lawyers seem silly sometimes, but look at what Solomon does with the deliberative process privilege by questioning every basic assumption. The list of documents Ripple wants to get from the SEC are in Appendix A of the brief, and you can see that each document is described. Then each SEC objection is listed, and then Ripple's argument is provided as to why the objection is not relevant. So this is very nicely presented for the judge. Note that the main privilege the SEC is claiming is the deliberative process privilege, I'm going to say DPP from now on, and that is claimed for each and every document. DPP is meant to protect government entities from having deliberations about policy decisions disclosed. As Ripple points out in its brief on page four, quote, to establish that the DPP applies, the SEC has the burden to show that the document was pre-decisional and deliberative. So the key things to focus on are whether the document is pre-decisional and deliberative, and Solomon doesn't just assume that because the SEC was discussing whether XRP or Ether were securities, that those discussions are somehow deliberative. In other words, he doesn't just assume that the person was present when the picture of him or her was taken. And looking at the documents in that light, the argument Ripple makes here is that it's not enough that the emails and memos the SEC wants to hide are talking about the security status of XRP and Ether. They must be deliberating a specific policy judgment. For example, it's not enough that they are the IRS is discussing tax laws in a document. They have to be discussing tax laws with an eye on whether they're going to pass an exemption for expenses related to nursing home care, for example. So what exact crypto policy was the SEC deliberating in these documents they don't want to hand over? Well, that's a very good question and one that Solomon asks. Looking at the middle of page six of Ripple's brief, quote, here, the SEC has never asserted that it commenced a policy process addressing whether to regulate digital assets as securities. Instead, the entire theory of this case turns on the SEC's contention that no policymaking or policy process was or is necessary because digital assets like XRP are plainly securities under 75 year old judicial precedent. And that is a compelling argument because the SEC has been very consistent in its position that it doesn't really need to provide any clarity or regulation to the market because the case authority and the Howey test is crystal clear. Don't take my word for it. Let's hear from the SEC Supreme Commander himself. We've been awfully clear on a bunch of this stuff. And really, this argument in this brief is just really going with the flow that the SEC has been laying down as to crypto assets for the last 10 years, that no special policy is necessary because current laws are more than sufficient. In fact, you could extrapolate from the affidavits in this case that even SEC staff members only deliberate internally about their own opinions and that no official SEC position even exists. As Hinman says in his affidavit filed with the court, quote, the speech, meaning his infamous Ether speech, was intended to express my own personal views. During my preparation for the speech, I discussed my thoughts with other Commission employees as part of the Commission's ongoing deliberations about whether offers and sales of Ether constituted securities transactions. The Commission had not and still has not taken any position or expressed a view as to whether offers and sales of Ether constituted offers and sales of securities, close quote. And at least the last part of this quote is still true because the SEC still has not taken a position on Ether. So has it been deliberating for well over three years now? And the problem for the SEC here really is that there never was a process of the deliberative process privilege in place, and it still isn't. So that is the position that the SEC has taken in order to try and keep Ripple from comparing Ether to XRP. And so Attorney Solomon takes their own argument and does a little judo here. That was an uchi makikomi throw, an inside throw, very well done. And just as that young lady in the video is pinned to the ground, look what happens to the SEC and its privilege arguments. Everywhere that you see a check next to the document which indicates deliberative process privilege, that check goes away. 1A, 1B, 1C, it's gone. In fact, the privilege is basically wiped out for all of the number one documents. It's also gone for 2, 3, and all the way to 14, leaving all those documents unprotected by the privilege and possibly subject to disclosure. All because Ripple sat back and looked at the fundamentals of the privilege. Yes, there were deliberations, but did the SEC have a deliberative process? And the answer is a resounding no. So I predict that the documents on this list that are protected by only DPP will be handed over, and that leaves only a handful of documents to argue about. And there is one in there that is a doozy, and it's actually highlighted by Solomon in his masterpiece motion on page 13. Quote, perhaps the most explosive revelation of the SEC's privilege log is that the SEC's Division of Corporation Finance, a division that operates distinctly from the Division of Enforcement, wrote a memorandum containing a legal analysis of XRP. That memorandum was then circulated to certain individuals at the SEC on the day before Director of Corporation Case Finance Bill Hinman gave a speech, publicly declaring Ether not to be a security. Close quote. A couple of things about this entry. This is a memorandum, so it's an official statement, not just an email. And it's written by the Division of Corporation Finance, which is the division that Mr. Hinman was the head of at the time, and was sent to the Division of Enforcement the day before Hinman gave his speech about Ether no longer being a security. Now, this memorandum is nothing less than Hinman's division of the SEC drafting a formal legal analysis of XRP, and sending it to certain people in another division just before Hinman's speech. So you got to give this one a wow, and I know the timing is important, and I know that because the coincidence one is just too much, and also because Solomon italicizes on the day before in his brief, and when Solomon italicizes something, I pay attention. So, this could be a highly exculpatory memorandum. That much is obvious. It can only say one of three things. One, XRP is no longer a security, in which case Ripple is looking pretty good from 2018 on. Two, it could say that XRP is definitely a security, and if that's what this memorandum says, then why did the Ripple investigation not happen until nine months later, and the lawsuit more than three years later? Or, more likely, it says that XRP's status is ambiguous, and I say that's most likely because lawyers love ambiguity. So, if that's what it says, it would be extremely helpful to the fair notice defense. So, most likely, this memo will be very helpful for Ripple. That much is obvious, and that is why the SEC does not want to hand it over. But, I've racked my feeble brain, and I can't figure out the significance of it being mailed to the Division of Enforcement the day before Hinman's speech. Now, why is that italicized and important? I honestly can't figure it out myself. So, you, my esteemed viewers, if you have any ideas, suspicion, or gossip, please let me know in the comments down below. I like doing that below. And, finally, I leave you with some bad news and a tease for next time. Just before I outlined this video, the SEC filed a motion to compel Ripple to turn over recordings of Ripple's meetings, and, well, into every life and every case, a little rain must fall. There's no such thing as the perfect case. So, there's some bad stuff in there for Ripple, but legal briefs is more than just a name. It's a promise. And so, I must go for now, but I will be back later this week to give you the rest of the story. Our lesson today is to remember always start a critical analysis of anything by thinking about the basic assumptions and go from there. Until next time, thanks for watching. Good job, darling. I'm gonna get that right over to Yahoo News.