- Ripple Inc. moves to court asking for a dismissal on the three accounts of fraud in an ongoing case against Brad Garlinghouse, the company’s CEO.
- The lawsuit against Mr. Garlinghouse claims the executive sold millions of dollars’ worth of XRP when the market was booming in 2017 by misleading customers he was “very long” on the digital asset.
A “court motion to dismiss,” filed by Ripple Inc. to the United States District Court in Northern California on June 8, aims to dismiss the charges faced by the CEO, Brad Garlinghouse.
The motion aims at removing three accounts of fraud by the plaintiff, Bradley Sostack, which did not show how Garlinghouse was purportedly fraudulent in selling his XRP.
The lawsuit is built around the interview that Garlinghouse made on XRP back in December 2017, claiming he was “very very long [on] XRP” regarding questions on his view on the investment asset. Furthermore, an amended complaint alleges that Garlinghouse sold a vast portion of his XRP coins shortly after receiving them from Ripple despite being “long.”
Ripple Dismisses the Lawsuit: “Must be Disregarded”
While the plaintiffs are claiming the Ripple CEO sold close to $58 million in Ripple shortly after saying he was long, the defendant’s lawyers claim the misrepresentation does not amount to fraud. The plaintiff is yet to prove this according to the Federal Rule of Civil Procedure 9 (b) which states that they must “state with particularity the circumstances constituting fraud.”
According to the defendant’s lawyers, plaintiffs are yet to establish the fraud in Garlinghouse selling off part of his investments. The motion filed with the district court further elaborates that the mere act of selling a portion of his XRP assets, Garlinghouse did not stop being long on the asset.
“Selling a portion of one’s XRP holdings does not mean that the seller cannot also be ‘very, very long’ in the same asset as a percentage of his or her own personal balance sheet.”
The defendants are asking the court to disregard the three fraud claims brought against the Ripple CEO. This will see the pursuit of fraud claims against Garlinghouse’s $58 million XRP sale in 2017 be dropped completely.
“Defendants thus respectfully request that the Court dismiss Plaintiff’s fraud claims with prejudice.”