According to CoinDesk, a federal judge has rejected a request from the U.S. Securities and Exchange Commission (SEC) in its ongoing securities fraud lawsuit against the Tron Foundation and its founder, Justin Sun. The case is being heard in the U.S. District Court for the Southern District of New York.

The SEC had sought to force a pre-trial conference or require the filing of an additional response, accusing the Tron defendants of improperly advancing a new argument in their defense. The SEC claimed that the defence argued the sales of TRX and BTT did not meet the 'common enterprise' prong of the Howey Test, which is used to determine whether a transaction qualifies as an investment contract. This argument was allegedly introduced after the Tron defendants had already filed their motion to dismiss on May 30.

In response, Tron’s lawyers accused the SEC of attempting to create a controversy and urged the court to deny the SEC’s request. They reiterated that their defence is based on the belief that the sales of BTT and TRX fail the Howey test’s third prong, which involves the expectation of profits from the efforts of others. Tron’s attorneys argued that the SEC’s request for an additional reply document mischaracterized their argument.

U.S. District Court Judge Edgardo Ramos sided with Tron’s lawyers, ruling to deny the SEC’s request. Ramos stated that since the defendants were not challenging the 'common enterprise' element of the Howey test, the SEC’s motion to strike the argument or for leave to file a sur-reply was denied.

A representative for Tron declined to comment on the pending legal matters.