Judge rejects SEC’s Ripple interlocutory appeal

Judge Analisa Torres shut down the Securities and Exchange Commission’s hope for an interlocutory appeal on Wednesday.

In a ruling, Torres wrote that the appeal for a stay of trial was also denied, ensuring that the trial against Ripple CEO Brad Garlinghouse and Christian Larsen will move forward as previously planned. 

Torres denied the SEC’s ability to pursue an interlocutory appeal on the grounds that her previous order — which gave Ripple a partial win — did not entail an order that “involved a controlling question of law,” which is necessary for the certification of an interlocutory appeal. 

The court did not find a “substantial ground for difference of opinion,” Torres wrote. 

If neither of those legal standards applied, then the SEC could have argued that the certification would “materially advance the termination of the litigation,” but Torres did not find merit in that argument. 

“Here, the SEC has not presented a ‘pure question of law’ that could be ‘decided quickly and cleanly without having to study the record,” Torres wrote.

“The SEC does not argue that the Court applied the wrong legal standard in deciding the cross-motions for summary judgment,” she continued. “Rather, the core of the SEC’s argument is that the Court improperly applied the Howey test to the facts in the undisputed record.”

As cited by Torres herself, the SEC has said that the Howey test should be applied to “the facts and circumstances at hand,” which means that its argument is not valid. 

The SEC filed its appeal in early August. At the time, the agency said that the appeal would “avoid the possibility of engaging in protracted remedies” in litigation.

Ripple did not immediately respond to a request for comment.

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