The Second Circuit Court of Appeals declined to revisit its ruling in the SEC versus Govil case, dealing another blow to the U.S. Securities and Exchange Commission in their ongoing legal battles within the cryptocurrency sector, specifically for Ripple.
Stuart Alderoty, Ripple‘s top legal executive, points out the string of losses the SEC has experienced in the wake of their latest setback.
The latest court decision emphasized by Alderoty is important because it rules that if a purchaser doesn’t experience any financial harm, the Securities and Exchange Commission (SEC) cannot claim disgorgement from the seller. This perspective could potentially apply to Ripple’s ongoing lawsuit, as the SEC has requested a large sum – $2 billion in fines and penalties.
In simpler terms, the Securities and Exchange Commission (SEC) was unsuccessful in their attempt to reconsider a previous court decision. This decision, made in the case of Govil, stated that if a seller hasn’t financially harmed the buyer, then the SEC cannot request compensation or “disgorgement” from the seller.
The SEC’s losing streak continues as the Second Circuit Court of Appeals refused to reconsider their ruling in Govil case, stating that if a buyer did not sustain any financial damage, the SEC cannot claim disgorgement from the seller.
— Stuart Alderoty (@s_alderoty) April 11, 2024
In the SEC versus Govil legal case, Aron Govil was accused of making deceitful securities sales through his business, Cemtrex.
In November last year, the SEC experienced a major loss in their lawsuit as the 2nd Circuit Court decided that the SEC couldn’t demand hefty penalties (disgorgement) unless they proved that investors had suffered real financial damage first. Essentially, there can be no penalty without proven harm.
A favorable court decision regarding this development is seen as good news for Ripple’s ongoing legal battle with the SEC. The company may use this judgment to strengthen its stance and resist the SEC’s requests more effectively.
Additionally, the Second Circuit Court’s unwillingness to reexamine its judgment in Govil might lead to significant implications for the SEC’s legal action against Ripple. Ripple could potentially challenge the SEC’s demands for disgorgement based on this ruling.
In the upcoming stages of the Ripple-SEC lawsuit, keep an eye on these significant dates: April 22 is when Ripple will submit their rebuttal against the SEC’s proposed $2 billion penalty, while May 6, 2024, is another important date to mark on your calendar.
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2024-04-12 14:48