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- MetaLawMan criticized the SEC’s $876 million disgorgement filing against Ripple.
- Ripple opposed the SEC’s $1.95 billion penalty, calling it administrative overreach.
- Bill Morgan noted that sophisticated investors bound by confidentiality clauses did not suffer the financial harm claimed by the SEC.
Popular cryptocurrency attorney James Murphy, also known as MetaLawMan, has raised concerns about the SEC’s approach to filing a disgorgement against Ripple. Murphy’s reservation about the filing is mainly related to its application in the ongoing Ripple vs. SEC case. Disgorgement refers to the recovery of funds, which, according to both the SEC and U.S. Supreme Court rulings, are intended to compensate victims of Ripple’s financial misconduct.
In its filing against Ripple, the SEC proposed a total fine of $1.95 billion, including a disgorgement of $876 million, a $876 million civil penalty, and a prejudgment interest of $198 million. However, Ripple rejected the penalty, stating, “The SEC’s remedial requests are more evidence of the administrative overreach that has beset this case.”
Ripple’s legal representatives added, “The agency also seeks disgorgement barred by controlling Supreme Court and Circuit precedent and a separate penalty that exceeds by more than 20 times what it has obtained from any other defendant or respondent in a digital-asset case.”
Speaking on the development, MetaLawMan pointed to a scenario where the SEC’s recovery of $900 million in disgorgement would be directed to the affected parties rather than the U.S. Treasury or the SEC.
“Think about this for a minute: the SEC wins and gets disgorgement, they’re going to have
to pile on more money to institutional investors who have already made a profit from their interaction with Ripple and buying XRP. I get a little worked up. This is so crazy; you know, can’t make this stuff up.” He stated.
Furthermore, Murphy emphasized an inconsistency in which these funds could benefit institutional investors.
Meanwhile, a legal practitioner, Bill Morgan, added, “Apparently, those sophisticated investors (victims), who could have made even more profits if they had known about bigger discounts offered to other sophisticated investors, signed contracts with confidentiality clauses that bound Ripple.”
Morgan further stated that the SEC’s argument of financial harm disregards the practical realities of contracts and commercial negotiations.
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