The lead plaintiff in an ongoing class-action lawsuit accusing Ripple of securities fraud has not demonstrated that statements made by CEO Brad Garlinghouse in 2017 are false, Ripple claims in court documents filed Wednesday.
The document (see in full below), filed at the Northern California District Court, comes in response to accusations Ripple failed to register XRP as a security with the U.S. Securities and Exchange Commission (SEC) and used deceitful tactics to defraud investors leading to false inflation in XRP's price.
Ripple's legal team said lead plaintiff Bradley Sostack's allegations relating to Ripple’s purported misrepresentations about XRP were based on "unsupported leaps of logic."
Sostack has not been able to explain why the alleged statements made by Garlinghouse are false, they claim.
Ripple's team also took aim at Sostack's "artful pleading," saying he "studiously avoids absolutes" in his allegations.
The class-action lawsuit was originally filed against Ripple and Garlinghouse in May 2018.
As one example in the original complaint, plaintiffs allege Garlinghouse had stated on Dec. 14, 2017, he was “very, very long XRP as a percentage of my personal balance sheet.”
Around the same time, Garlinghouse is claimed to have sold 67 million XRP (worth around $16.4 million at press time). This is a misrepresentation, plaintiffs argue, coming at the time he said he was long on the cryptocurrency.
Ripple filed a motion to dismiss the suit in part in June, asking the court to dismiss all three counts of fraud without leave to amend.
A month later, Sostack filed an opposition to the motion, saying the suit had met the demands of U.S. fraud law having identified "over a dozen false or misleading statements made by Ripple and its CEO."