SEC refiled dismissal of claims against two Ripple executives

The Securities and Exchange Commission and defendants in its Ripple Labs enforcement case filed a corrected stipulation on October 20, 2023 to dismiss the agency’s remaining claims against Ripple chief executive Bradley Garlinghouse and co-founder Christian Larsen.

Court document 919 targeted the claims that the two executives aided and abetted Ripple’s alleged violations of Section 5 of the Securities Act through offers and sales of XRP categorized in the litigation as “Institutional Sales.” The filing said those claims were dismissed in their entirety, with prejudice and without costs or fees to either side.

The development removed the contemplated individual-liability trial from the center of the case. It did not dismiss the SEC’s case against Ripple, reverse the court’s earlier conclusions concerning institutional sales or establish that every transaction involving XRP had the same legal character.

Why October 20 is the operative archive date

The stipulation was dated October 19, but the federal docket records document 919 as filed on October 20. That distinction matters for a daily reconstruction.

An earlier docket entry, document 918, had been submitted on October 19. On October 20, the clerk marked that entry deficient because the wrong filing event had been selected and the stipulation lacked the required signatures from all appearing parties. The clerk directed SEC attorney Jorge Tenreiro to refile it using the proper event type.

Document 919 was the resulting corrected filing. The docket also records an accompanying SEC letter, document 920, entered on October 20 and dated October 19. The narrow verified development for October 20 is therefore the corrected entry of the parties’ partial-dismissal stipulation—not the first public report of the agreement and not the judge’s later endorsement.

What was dismissed—and what remained

The SEC’s original December 22, 2020 complaint alleged that Ripple, Garlinghouse and Larsen violated federal securities-registration requirements through XRP transactions. By October 2023, the case had already been narrowed by a July summary-judgment decision.

Contemporaneous Reuters reporting explained that the court had ruled in the SEC’s favor regarding certain sales by Ripple to sophisticated institutional buyers while ruling that other XRP distributions, including programmatic exchange sales considered in that decision, did not constitute the same kind of unregistered securities offering. The remaining aiding-and-abetting claims against Garlinghouse and Larsen had been headed toward a jury trial.

The October 20 stipulation addressed only those individual aiding-and-abetting claims tied to institutional sales. “With prejudice” meant the specified claims were not being preserved for refiling. It did not erase the court’s institutional-sales ruling against Ripple or decide the remedies that could follow from it.

That scope is important because descriptions such as “the Ripple case was dismissed” would have overstated the record. Ripple Labs remained a defendant, and the dispute over an appropriate remedy for its institutional sales remained open.

Why the filing mattered

For Garlinghouse and Larsen, the stipulation removed the immediate prospect of trying whether they knowingly or recklessly assisted Ripple’s violations. For the SEC, it narrowed a prominent crypto enforcement action after the agency had failed earlier in October to secure permission for an interlocutory appeal of parts of the July decision.

For the broader industry, the filing demonstrated how transaction-specific the litigation had become. The surviving record did not establish a universal classification for XRP independent of how it was offered or sold. Nor did ending claims against two executives produce a final judgment against Ripple.

Later procedural context

On October 23, 2023, Judge Analisa Torres endorsed the partial dismissal. On October 24, she vacated the trial schedule and directed the parties toward remedies proceedings concerning Ripple. Those later entries confirm the practical effect of document 919, but they were not yet part of the completed court record on October 20.