Ripple Condemns SEC’s Demand For Employee Slack Messages In On-Going Court Case

• Teresa Bach
• August 19, 2021
• Defi
• 0 Comments

In the ongoing SEC vs. Ripple court case, the defense team has written to Judge Sarah Netburn opposing the SEC’s motion to compel the firm to produce Slack communications. They demand the production of over 1 million pages of discovery.
Slack is a proprietary message platform featuring chat rooms, private messages, and direct messaging. It gained popularity during the government-imposed lockdowns of early 2020.
At the time, many firms were forced to implement work-from-home policies. Slack found favor as a tool to enable staff communication under these circumstances.
In bringing the motion, SEC attorney Jorge Tenreiro put forward the case that the Slack messages are required to build a complete picture of the case for summary trial.
“The messages produced show Ripple employees (including custodians whose Slack messages Ripple refuses to search) discussing issues directly relevant to disputes at the heart of this case.”
Ripple Defense Team Claims Slack Messages Are Irrelevant To The Dispute
On behalf of Ripple, legal firm Debevoise & Plimpton opposed the SEC’s motion with a new filing this week.
The firm labeled the SEC’s request an “extraordinary demand,” and a “costly fishing expedition”. Adding that it would take too long to complete and bring significant cost to their client.
“The SEC’s extraordinary demand calls for an extensive and costly fishing expedition that would likely take months to complete and come at very significant cost.”
Ripple’s defense attorneys went on to label it “disproportionate,” and a wholly unreasonable request to demand over 1 million pages of documentation.
“The SEC’s disproportionate request is also unreasonably duplicative of Ripple’s extensive production of over one million pages of discovery — including emails, documents, text messages, and responsive Slack messages for 33 custodians.”
What’s more, they argue that the SEC’s demand is further unjustified because the documents are not critical, nor are they uniquely relevant to the matters of the court case.
“In each case, the SEC vastly overstates—and in many cases, misstates—the testimonial record and the potential relevance of the requested Slack messages.”
As such, Debevoise & Plimpton conclude by asking Judge Netburn to deny the SEC’s request.
Slack Data Collection
In addition to the above arguments, Ripple’s defense team also submitted a declaration from Canaan Himmelbaum. He is the Director of Global Business Development at Consilio, who operates as a data vendor for Ripple.
In it, Himmelbaum described the challenges involved in collecting data from the Slack platform. This includes processing the vast volumes of data, running into the terabytes. He also mentioned complications related to handling the customized modules that hinder data extraction. As well as the exports coming out in machine-readable JSON format, which does not lend itself to human review.
According to the declaration, Himmelbaum estimates the total cost to meet the SEC’s request would come to $900,000.