No trial: SEC moves to dismiss charges against Ripple’s Garlinghouse, Larsen

The Securities and Exchange Commission filed on Thursday to dismiss its claims against Ripple CEO Bradley Garlinghouse and former Ripple executive Christian Larsen. 

The two were slated to appear in court next April. They faced charges of aiding and abetting securities laws violations related to sales of Ripple’s XRP. While the executives faced charges, it’s important to note that Ripple Labs — a named defendant in the suit — was not set to be part of the spring jury trial.

“Today was an even better day…In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a decade,” CEO Brad Garlinghouse said in a post on X.

The news comes after the SEC was denied its request to seek an interlocutory appeal earlier this month. Judge Analisa Torres, the judge on the case, also denied the regulatory agency’s appeal for a stay of trial, which would have delayed the start of the trial.

In the Thursday filing, the SEC wrote, “The SEC and Ripple intend to meet and confer on a potential briefing schedule with respect to the pending issue in the case—what remedies are proper against Ripple for its Section 5 violations with respect to its Institutional Sales of XRP.”

The two parties agreed on a Nov. 9 deadline to propose a schedule. However, the court may intervene if the two cannot reach a compromise. 

“The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC,” Ripple chief legal officer Stuart Aldeorty wrote in a post on X.

Earlier this year, Judge Torres ruled in a summary judgment that the programmatic sale of Ripple’s XRP token did not count as an investment contract, dealing a blow to the SEC in its years-long fight against the crypto company. 

“Therefore, the vast majority of individuals who purchased XRP from digital asset exchanges did not invest their money in Ripple at all. An Institutional Buyer knowingly purchased XRP directly from Ripple pursuant to a contract, but the economic reality is that a Programmatic Buyer stood in the same shoes as a secondary market purchaser who did not know to whom or what it was paying its money,” Judge Torres wrote at the time.

The SEC and Ripple have been locked in a legal battle since the SEC first filed its complaint against the company in December 2020.

Updated Oct. 19, 2023 at 5:32 pm ET: Added comment from Brad Garlinghouse.

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