The ruling by a Southern District of Florida court on January 21, 2022, rejected the fair notice defense as a matter of law and awarded the SEC summary judgment.
The SEC has today filed a letter of supplemental authority in further support of its motion to strike the fair notice defense.
Addressed to Judge Analisa Torres, the plaintiff brings to the table the SEC v. Keener case in which the court concluded that the defendant unlawfully failed to register as a securities “dealer”.
“In doing so, Keener rejected the same “fair notice” argument Ripple asserts in this case and that the SEC has moved to strike, holding that the defense fails as a matter of law”, said the letter.
According to court documents, the Keener defendant contented he had “no fair notice that his conduct could be unlawful” because he lacked notice his conduct could make him a “dealer” as defined in the Exchange Act.
The defendant’s arguments included that:
1) “the statutory language is not transparent, which is why the SEC issued so many interpretations over the years”;
2) the SEC’s “position in this litigation directly contradicts its prior guidance”;
3) whether the defendant had fair notice of the new way in which the Exchange Act definition of “dealer” would be applied is a factual question that must be decided by the jury.
The ruling by a Southern District of Florida court on January 21, 2022, rejected the fair notice defense as a matter of law and awarded the SEC summary judgment.
“Defendant had notice that his conduct could be unlawful based upon “the express language of the Exchange Act, decisions from this circuit applying the definition of “dealer” and SEC guidance itself”.
The SEC filed the letter because it considers the case as being analogous to the fair notice argument on the SEC v. Ripple lawsuit, thus providing additional authority for the SEC’s motion to strike Ripple’s fourth affirmative defense.
