Ripple Executives Reject SEC Personal Finance Investigation As Overbreadth

Ripple executives Bradley Garlinghouse and Christian Larsen have rejected requests from the U.S. Securities and Exchange Commission to provide personal financial information as part of the ongoing investigation into a possible breach of XRP sell securities.

On March 11, attorneys for the co-founders of Ripple Labs requested a protection order over their personal information and asked the court to quash subpoenas issued to six of the defendants’ banks.

Specifically cited banking institutions were SVB Financial Group, First Republic Bank, Federal Reserve Bank of New York, Silver Lake Bank, Silvergate Bank and Citibank.

Lawyers for Garlinghouse and Larsen have argued that the SEC went beyond the scope of its investigations when it said the defendants entangled their personal finances with those of Ripple Labs. Thursday’s filing stated:

“The SEC’s multi-pronged attempt to troll through the personal financial information of the individual defendant in a non-fraud litigation, where the defendants have already agreed to produce the relevant information regarding the disputed transactions, is a grossly inappropriate overshoot.”

The “disputed transactions” in question relate to the unrecorded sale of XRP 14.6 billion as of 2013 – a sum of $ 1.38 billion at the time of the complaint, which is now worth $ 6.5 billion.

Garlinghouse and Larsen’s legal team make it clear their clients’ willingness to cooperate with respect to financial records relating to XRP sales, including trading records and documentation of offsets received from Ripple.

“Specifically, the individual defendants have agreed to produce (a) business records relating to the sales of XRP that the SEC is challenging in this case, and (b) financial records relating to the compensation they received from Ripple,” said the record.

Financial records regarding independent business activities and day-to-day expense accounts, lawyers say, are irrelevant to the case in question. The deposit stated:

“As written, therefore, these demands demand everything from the proceeds of independent business activities to the amount of money they spend at the grocery store each week.”

The subpoenas issued by the SEC request years of transaction data and monthly statements from Garlinghouse and Larsen’s personal bank accounts, including images of all money orders, checks and electronic funds transfers.