Attorney Fred Rispoli is taking former SEC officials Clayton and Hinman to court for their actions against Ripple. Per the filing with the US district court for Arizona, the class action complaint represents Shannon O’Leary and XRPL users who are believed to have incurred losses due to the lawsuit initiated against Ripple.
Ex-SEC Officials Hit With A Lawsuit For Conspiring To Destroy XRP
According to attorney Rispoli, lead plaintiff and XRP investor Shannon O’Leary has decided to take a stand against the tortious interference committed by former Securities and Exchange Commission chairman Jay Clayton and his former director of corporation finance William Hinman.
The lawsuit alleges that Clayton and Hinman engaged in secret meetings with Ethereum network stakeholders during their tenure at the SEC without informing other commissioners at the agency. The heart of the suit is that they were supposedly plotting to destroy the XRP network — which is a direct rival to Ethereum — while deceiving the public that their personal views reflected the official position of the regulatory agency.
Rispoli notes that the two former SEC officials were generously rewarded by the entities that were benefitting from the pair’s exploits while at the agency. Their conduct, however, considerably impaired the plaintiff’s business expectancy in the XRP network, leading to damages of approximately $42 billion.
It’s worth noting that several lawsuits have been filed against the SEC over the Ripple case. However, this class-action complaint represents the very first time SEC officials have been named as defendants.
Clayton And Hinman’s Conflicts Of Interest
Notably, Jay Clayton has come under scrutiny over his handling of crypto affairs while he was the chairman of the SEC. Clayton categorically stated in 2018 that bitcoin was not a security. Moreover, the suit against Ripple was lodged just as his term as SEC chair was ending. After leaving the agency, Clayton then took up employment at One River Digital Asset Management — a United States-based investment firm focused on bitcoin and ether.
This prompted the non-profit organization Empower Oversight to investigate Clayton and Hinman on suspicions of potential crypto conflicts of interest. Empower Oversight allegedly obtained more than 200 email records through a Freedom of Information Act request from the SEC.
Based on these emails, the organization suggests that Hinman had been cautioned about a conflict of interest owing to his close relationship with Simpson Thatcher & Bartlett. Simpson Thatcher & Bartlett is part of the Enterprise Ethereum Alliance that promotes ether and also became Hinman’s employer after he left the SEC.
In recent developments to the ongoing securities fraud dispute between the SEC and Ripple, the court rejected the SEC’s request to reconsider censoring documents under privilege relating to Hinman’s well-known speech in June 2018 where he said ethereum could not be classified as a security. This ruling was considered to be a “very big win” for Ripple by a respected defense lawyer in the XRP community.