Former U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton and executive Bill Hinman are being sued by a Ripple (XRP) investor over their role in the alleged mismanagement of the Ripple case.
The class-action lawsuit, filed on April 11, 2022 by attorney Fred Rispoli, representing XRP investor Shannon O’Leary against the former executives, claims that Clayton and Hinman failed to disclose their conflicts of interest in relation to Ripple.
It is worth noting that before joining the SEC Hinman, a Silicon Valley deals lawyer, held a major post at the U.S. law firm Simpson Thacher, an organization that sits on the Enterprise Ethereum Alliance, representing Ether’s (ETH)-related financial interests. What’s interesting here is that despite leaving his post to join the SEC in May of 2017, Hinman continued to receive millions in financial payments from the firm on top of his roughly $217,000 salary.
In fact, and as Bloomberg has reported, Hinman received more than $15 million in payments from the Simpson Thacher law firm during his four years at the SEC.
Meanwhile, another Bloomberg report early last year suggested that after leaving his position as the SEC Chair, Clayton had been employed by One River Asset Management, a digital asset hedge fund focused exclusively on Bitcoin (BTC) and ETH.
Rispoli alleges that by using their positions with the SEC to act in favor of their previous and present employers, which have strong affiliations with the Ethereum Network–a direct competitor to the XRPL Network, the former SEC exec duo not only hurt the hundreds of thousands of XRP investors by exploiting their private sector relationships for personal gain, but also violated in a willful manner SEC ethics counselmandates and federal regulations.
The lawsuit further alleges that throughout their tenure at the SEC, former chairman Clayton and the commission’s finance director Hinman engaged “in secret, ‘off the books,’ and ‘ad hoc’meetings” with Ethereum’s stakeholders without the knowledge of the comission’s top brass.
Rispoli claims that all this was done as “a plot to destroy the XRPL Network while simultaneously deceiving the public through [the duo’s positions and their] sustained public media campaign that their personal opinions represented official positions of the SEC.”
Rispoli also notes that ultimately, the defendant’s conduct caused the plaintiff’s business expectancy of at least $42 Billion in the XRPL Network.
In a lengthy Twitter thread, Rispoli points out that while no agency has taken any interest to investigate what he calls the shady practices and activities of Clayton and Hinman, O’Leary had decided to take up the matter.
“On April 11, 2022, a class-action lawsuit was filed against Mssrs. Clayton and Hinman for tortious interference in ALL XRPL Network Users’ valid business expectancy in the XRPL Network. The Lead Plaintiff and my client, Shannon O’Leary, decided to take a stand,” Rispoli noted.
But this thread is all about hope. Many of you still have no idea how important and how powerful you truly are. All it takes is One. Which becomes Two. Then Four. Then, eventually, Victory. 12/20@joerogan @elonmusk
— Fred Rispoli (@freddyriz) April 13, 2022
The class action lawsuit marks the first time that SEC officials have been individually targeted.
It will be interesting to see how this case develops, as it could have major implications for the cryptocurrency industry.
XRP, last printing above $0.72, traded in a range of $0.704 – $0.7402, indicating relative volatility over the last 24 hours. The coin’s total market cap currently prints around $35 billion, ranking it in 6th place overall.