Former SEC officials Clayton and Hinman have been sued by Fred Rispoli for their actions against Ripple. Shannon O’Leary and XPRL users are represented in the class action complaint filed in the United States District Court for the District of Arizona. They were supposedly said to have caused losses due to the Ripple case.
Former SEC Officials Sued For Planning To Destroy XRP Network
Attorney Fred said that Shannon O’Leary, the lead plaintiff, and XRP investor, decided to go against the intrusion committed by Jay Clayton, the former Securities and Exchange Commission chairman, and his previous director of corporation finance, William Hinman.
According to the lawsuit, Clayton and Hinman held secret meetings with the stakeholders of the Ethereum network when they were in power at the SEC, without telling any other commissioners at the agency. The main thing about the lawsuit is that they were presumably planning to damage the XRP network — a close competitor to the Ethereum network— while fooling the general public that their personal opinions show the regulatory agency’s official position.
Fred identified that Clayton and Hinman got handsome rewards from the people who benefited from their accomplishments while at the agency. Their behavior, however, impeded the plaintiff’s business conjecture in the Ripple network, resulting in losses of roughly $42 billion.
It’s worthy of note that many lawsuits have been cited against the SEC because of the XRP case. Although, this class action complaint shows that it’s the first time SEC officials were named defendants.
Clayton And Hinman’s Conflicts Of Interest
Primarily, Jay Clayton had come under surveillance over the issues regarding how he handled crypto affairs when he was the SEC chairman. In 2018, Clayton unequivocally declared that bitcoin isn’t a security. Besides, the lawsuit against XRP was set towards the end of his term as the SEC Chairman. After Clayton left the agency, he got employed at One River Digital Asset Management — a U.S.-based firm centered on bitcoin and Ether investments.
This development led Empower Oversight, a non-profit organization, to monitor Hinman and Clayton on suspected potential cryptocurrency conflicts of interest. It was alleged that Empower Oversight got over 200 email records via a Freedom of Information Act request from the Securities and Exchange Commission (SEC).
From these emails, the organization says that Hinman had warnings about conflicting interests because of his close friendship with Bartlett and Simpson Thatcher. Simpson Thatcher and Bartlett are involved with the Enterprise Ethereum Alliance that promotes Ethereum, and they gained employment under Hinman after his tenure at the SEC.
There have been new developments amid the ongoing Securities fraud conflict between the SEC and Ripple. The court had rejected the request of the SEC to rethink censoring documents under privilege in line with Hinman’s famous speech of June 2018. In the speech, Hinman said Ethereum is not a security. A renowned defense lawyer in the XRP community said Ripple’s ruling is “a huge win.”