Ripple has been only partially successful in its bid to have a class-action lawsuit over alleged securities fraud thrown out
In a court ruling filed last Friday, Judge Phyllis J. Hamilton of the U.S. District Court of Northern California granted with prejudice two parts of Ripple motion to dismiss the 10 claims against it and its CEO, Brad Garlinghouse.
Ripple mixed success in motion to dismiss a lawsuit alleging securities fraud
Ripple has only been partially successful in its attempt to file a collective lawsuit over the security fraud allegations.
The alleged allegations were a consolidation from a group of disgruntled investors who claimed Ripple and Garlinghouse did not register XRP as a security with the US Securities and Exchange Commission and launched Misleading statements about cryptocurrencies.
In the ruling, Judge Hamilton agreed that plaintiff Bradley Sostack did not support two claims related to a series of alleged fraudulent claims by Ripple and Garlinghouse in 2017.
As a result, Ripple proposes to dismiss the sixth claim about misleading XRP ads and a seventh claim alleging illegal securities issuance. However, Judge Hamilton also denied other parts of Ripple’s proposal to dismiss the lawsuit, which was revised in late February.
These include a fourth complaint regarding the allegation that Garlinghouse misrepresented the status of its XRP investment.
The problem is the CEO’s statement as follows:
“Very, very long XRP as a percentage of my personal balance sheet.”
While in fact, he has sold millions of dollars in cryptocurrency. However, Sostack is now able to continue with four out of 10 claims solely based on Garlinhouse’s allegedly false claims regarding the scope and character of his XRP holdings.
These statements include statements about banks using XRP to generate liquidity and an increase in token demand based on its value proposition.
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