Ripple motion to dismiss class action lawsuit only partly granted
Cross border payment remittance company Ripple has been part-granted a motion to dismiss some of the claims brought against it by investors, as the firm battles an ongoing class-action lawsuit over alleged securities fraud.
Investors claim Ripple and the company's CEO Brad Garlinghouse failed to register XRP with the U.S. Securities and Exchange Commission (SEC), and then went on to make misleading statements about the token, leading to the eventual class action suit.
In the U.S. District Court of Northern California last Friday, Judge Phyllis J. Hamilton granted two legs of Ripple's motion for dismissal, with 10 claims total outstanding against the firm.
The judge said that plaintiff Bradley Sostack had provided insufficient evidence to support two of the claims, which relate in particular to purportedly false statements made by the firm back in 2017.
However, for the most part, the judge refused to dismiss the claims against the company, including over misleading advertisements for XRP and allegations of an illegal securities issue.
One particular claim found that Garlinghouse had misrepresented his personal investments in XRP to investors, telling prospective customers that he was personally "very, very long XRP as a percentage of my personal balance sheet." In reality, Garlinghouse had sold off substantial parts of his investment in XRP, adding up to millions of dollars.
Other claims alleged to be misleading included that banks were using XRP for liquidity, and that token demand was being driven by its "value proposition."
Based on this and other of the claims still standing, Sostack now has leave to proceed with the action against Ripple and Garlinghouse.
While the decision by Judge Hamilton leaves Ripple in a marginally better position, the firm will now be expected to account for the remaining claims in the class action lawsuit.
Investors claim Ripple and the company's CEO Brad Garlinghouse failed to register XRP with the U.S. Securities and Exchange Commission (SEC), and then went on to make misleading statements about the token, leading to the eventual class action suit.
In the U.S. District Court of Northern California last Friday, Judge Phyllis J. Hamilton granted two legs of Ripple's motion for dismissal, with 10 claims total outstanding against the firm.
The judge said that plaintiff Bradley Sostack had provided insufficient evidence to support two of the claims, which relate in particular to purportedly false statements made by the firm back in 2017.
However, for the most part, the judge refused to dismiss the claims against the company, including over misleading advertisements for XRP and allegations of an illegal securities issue.
One particular claim found that Garlinghouse had misrepresented his personal investments in XRP to investors, telling prospective customers that he was personally "very, very long XRP as a percentage of my personal balance sheet." In reality, Garlinghouse had sold off substantial parts of his investment in XRP, adding up to millions of dollars.
Other claims alleged to be misleading included that banks were using XRP for liquidity, and that token demand was being driven by its "value proposition."
Based on this and other of the claims still standing, Sostack now has leave to proceed with the action against Ripple and Garlinghouse.
While the decision by Judge Hamilton leaves Ripple in a marginally better position, the firm will now be expected to account for the remaining claims in the class action lawsuit.