- Stuart Alderoty, the Chief Legal Officer of Ripple criticizes the US financial regulator’s argument against the payment giant.
- Alderoty drew a parallel between the 1946 Howey Test case at the Supreme Court and the SEC v. Ripple lawsuit.
- Alderoty argues that the Securities and Exchange Commission’s interpretation of the common enterprise is flawed.
US financial regulator Securities and Exchange Commission’s (SEC) lawsuit against Ripple continues to drag on without a resolution. Ripple’s Chief Legal Officer Stuart Alderoty took a jab at the SEC’s interpretation of a “common enterprise,” and drew parallels between the Howey Test case and SEC v. Ripple lawsuit.
Ripple’s Chief Legal Officer critiques the SEC’s understanding of common enterprise
Stuart Alderoty, the Chief Legal Officer of Ripple recently tweeted about the 1946 Supreme Court case dubbed “the Howey test.” In the 1946 lawsuit, the US SEC was unsuccessful in its argument that an investment in a “common enterprise” was unnecessary provided there was a “community of interest.”
Alderoty argues that the SEC was wrong in its 1946 argument and its wrong in its case against Ripple. Common interest is not the equivalent of common enterprise.
In 1946, in its Sup Ct “Howey” brief, the SEC unsuccessfully argued that an investment in a “common enterprise” was unnecessary provided there was a “community of interest”. The SEC was wrong then and it is still wrong now. Common Interest ≠ Common Enterprise. pic.twitter.com/RvH50b6Yjv
— Stuart Alderoty (@s_alderoty) May 13, 2023
In the SEC’s case against Ripple Labs, the regulator alleges that the firm conducted an unregistered securities offering worth $1.3 billion by selling XRP. Alderoty’s comments are aligned with Ripple’s efforts to tackle the SEC’s allegations.
In its allegations against Ripple, the SEC argues that XRP should be classified as a security, and the virtual asset’s sale requires securities registration. The firm has long disputed this categorization stating that the altcoin is not a security, the team is battling these allegations in the SEC’s lawsuit, awaiting a verdict from Judge Torres.