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Ripple lawsuit update: Judge rejects SEC's request to suppress Ripple docs

According to a court filing, Judge Netburn determined that attorney-client privilege does not extend to internal records related to the William Hinman speech.

The latest court filing in the SEC vs. Ripple lawsuit revealed that Judge Netburn refused the US Securities and Exchange Commission's attempt to suppress internal materials.

The records pertain to a speech given on June 14, 2018 by William Hinman, then-Director of the Division of Corporate Finance.

During his address, Hinman approved Bitcoin and Ether, stating that neither meet the criteria of a security and hence are free from registration under US securities legislation.

The SEC stated in the move that the records are protected by attorney-client privilege, which prevents confidential conversations between attorneys and clients from being revealed to other parties.

Judge Netburn, on the other hand, decided that the SEC must submit the materials for "in-camera review." This is a procedure in which the sitting judge reviews secret or sensitive material to determine whether it may be utilized by a party or made public.

Judge Netburn dismisses the claim of attorney-client privilege.

The attorney-client privilege must be proven, the communication must be secret, and the "predominant aim" of the communication must be to seek or offer legal advice, according to Judge Netburn.

According to the petition, the SEC stated that Hinman was a client of the SEC lawyers in his role as Director, sought legal guidance in preparing and revising the speech, and the papers were secret.

Judge Netburn, on the other hand, stated that the court does not need to determine whether Hinman was a "client" of the SEC's lawyers because the evidence demonstrated that the primary aim of conversations was not to offer legal advice.

Furthermore, the court referred to the attempt to hide the records as "hypocrisy." In that case, the agency argued that Hinman's statement was irrelevant to the market's knowledge of bitcoin regulation, despite the fact that Hinman had obtained legal guidance before preparing the address.

Ripple's case has gained traction

According to the petition, conversations between Hinman and SEC lawyers were better described as "policy guidance," such as whether a statement is a good or terrible idea.

“The law is settled that policy advice—like whether it is a good idea or a bad idea to make a particular public statement as a public figure—or communication advice—like whether a statement is on-message with the agency’s position.”

Judge Netburn stated that policy counsel is separate from legal advice, even when provided by a lawyer. As a result, the conversations about the speech between Hinman and the SEC's attorneys are not protected by attorney-client privilege.

The judge ordered the SEC to provide the required materials for consideration behind closed doors.

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