SEC Fires Back at Ripple with Its Reply on the Hinman Speech Documents

Key Insights:

• On Wednesday, the SEC filed a reply to support its claim that attorney-client privilege protects internal documents relating to the Hinman speech.
• Last week, Ripple responded to an SEC brief claiming attorney-client privilege in what has become the focal point of the case.
• XRP and the markets will now await a court ruling, which could decide the outcome of the SEC case against Ripple.

The SEC v Ripple case has had some pivotal moments in recent months. Yet, the SEC continues to go full circle and revisit court rulings relating to William Hinman’s 2018 speech.

From an SEC perspective, the focus is undeniable. In early May, Ripple defense lawyer Matthew Solomon opposed at least the sixth SEC motion, “filing in opposition to Defendants’ August 10, 2021, motion to compel.”

Solomon stated,

“Since the Defendants filed this motion to compel nearly nine months ago, the Court has twice overruled the SEC’s improper deliberative process privilege objections. Notwithstanding that, and close of fact and expert discovery, the SEC continues to withhold all documents related to a former SEC official’s June 14, 2018 speech.”

The Solomon opposition was in response to a court decision granting the SEC’s request to file a reply brief in connection with the SEC’s attorney-client privilege claims about the Hinman speech documents.

Hinman, former SEC Director of the Division of Corporation Finance, remains a central figure in the SEC v Ripple case.

In a 2018 speech, Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities. The SEC is looking to shield documents and emails relating to internal discussions and Hinman’s famous speech.

In response to last week’s Ripple reply to the SEC brief, the SEC responded to the Ripple reply overnight.

SEC in an Everlasting Battle to Shield William Hinman’s Speech Documents

On Wednesday, the SEC filed its anticipated reply to support its claim that attorney-client privilege protects Hinman’s speech-related documents.

Defense Attorney James Filan shared the filing on Twitter, saying,

“The SEC has filed its reply in support of its April 29, 2022 letter claiming that the attorney-client privilege protects internal SEC documents relating to Hinman’s speech.”

#XRPCommunity #SECGov v. #Ripple #XRP The SEC has filed its reply in support of its April 29, 2022 letter claiming that the attorney-client privilege protects internal SEC documents relating to Hinman’s speech.https://t.co/jTiOZlDYeg

— James K. Filan 🇺🇸🇮🇪96k+ (beware of imposters) (@FilanLaw) May 19, 2022

Salient points from the filing introduction included,

• Dozens of attorneys across the SEC’s offices and divisions used their legal expertise and knowledge of confidential SEC matters to draft and edit the Speech – something these attorneys could not do in response to a personal, non-work-related request.
• Therefore, regardless of whether the final Speech contained “personal views,” as opposed to official agency policy, the attorney-client privilege protects the legal advice Director Hinman obtained from SEC counsel during the development of the Speech.

The filing then went on to argue its case, with a focus on four key areas, these being,

• Director Hinman communicated with SEC staff to obtain their legal advice.
• Director Hinman and SEC staff were necessarily acting in their official capacities when they drafted and commented on the speech.
• Disclosure would reveal SEC confidences.
• The SEC has standing to assert the attorney-client privilege.

In conclusion, the SEC stated,

“The SEC stands ready to submit its proposed redactions for in camera review at the Court’s discretion.”

Both parties and XRP investors will need to await a ruling that could test XRP support near-term.

SEC v Ripple to Dictate XRP Price Action

At the time of writing, XRP was down 0.77% to $0.4018. A mixed start to the day saw XRP rise to an early morning high of $0.4124 before sliding to a low of $0.3916.

This morning’s pullback follows on from a 7.39% slide on Wednesday.

Technical Indicators

XRP will need to move through the $0.4166 pivot to target the First Major Resistance Level at $0.4301. XRP would need broader crypto market support to break out from the morning high of $0.4124.

In the event of an extended rally, XRP should test the Second Major Resistance Level at $0.4550. The Third Major Resistance Level sits at $0.4935.

Failure to move through the pivot at $0.4166 would bring the First Major Support Level at $0.3915 into play.

Barring another extended sell-off throughout the day, XRP should avoid sub-$0.3850. The Second Major Support Level sits at $0.3782.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. At the time of writing, XRP sits below the 50-day EMA, currently at $0.4427. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also pulled back from the 200-day EMA, XRP negative.

A move through the 50-day EMA would support a return to $0.50. While sentiment from the broader crypto market will influence, a court ruling on the SEC’s claim of attorney-client privilege will be the key.