According to U.Today, the Second Circuit Court of Appeals has declined to revisit its decision in the SEC v. Govil case, marking another loss for the U.S. Securities and Exchange Commission (SEC). This development could have significant implications for Ripple and the wider cryptocurrency industry. Ripple's Chief Legal Officer, Stuart Alderoty, emphasized the importance of this ruling, which stated that if a buyer does not suffer any financial loss, the SEC cannot demand disgorgement from the seller. This perspective could be particularly relevant to Ripple's lawsuit, where the SEC has sought a hefty sum of $2 billion in fines and penalties.
The SEC v. Govil case centered around allegations that Aron Govil conducted fraudulent securities offerings through his company, Cemtrex. In November of the previous year, the SEC experienced a major setback in the lawsuit when the 2nd Circuit ruled that the SEC could not request a substantial disgorgement amount without first demonstrating that investors incurred actual financial harm. This 'no harm, no foul' ruling is seen as a positive development for Ripple's legal defense. The company could use this ruling to strengthen its stance against the SEC's demands.
The refusal of the Second Circuit Court to reconsider its decision in the Govil case could have extensive implications for the SEC's case against Ripple. Ripple could utilize this ruling to challenge the SEC's assertions regarding the disgorgement it seeks. Looking ahead, key dates in the Ripple-SEC lawsuit include April 22, when Ripple will respond to the SEC on the $2 billion it seeks in penalties, and May 6, 2024.