Ripple Says XRP Lawsuit Fails to Show CEO Committed Fraud

Ripple Says XRP Lawsuit Fails to Show CEO Committed Fraud

Ripple CEO Brad Garlinghouse (Credit: Nikhilesh De for CoinDesk)

Ripple and CEO Brad Garlinghouse say an ongoing lawsuit fails to show how Garlinghouse committed fraud when allegedly selling millions of dollars’ worth of in 2017.

Lawyers representing the San Francisco-based blockchain company said in a Monday that lead plaintiff Bradley Sostack has not demonstrated how a series of supposedly fraudulent statements made by Garlinghouse and Ripple employees were anything of the kind.

In the U.S., the threshold for what can be considered fraud is based on Federal Rule of Civil Procedure 9(b), which stipulates a plaintiff must show two things: first, how fraud was actually committed; second, that it was done so with scienter – i.e the defendants knew they were misleading others.

Ripple’s lawyers argue the plaintiff’s amended complaint – in March – did not fulfill the first pre-requisite:

“Plaintiff’s FAC [first amended complaint] identifies the allegations that purport to contain false statements,” reads the filing. But these “alleged misrepresentations” cannot be shown to be considered fraudulent and “Plaintiff does not (and cannot) explain how and why these statements are false.”

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