San Francisco-based blockchain company Ripple and its CEO Brad Garlinghouse fight fraud charges in court saying the plaintiff has not provided details on the alleged crimes.
The lawyers of the company moved on Monday for dismissal with prejudice of three of the fraud charges brought against Ripple and its CEO by the lead plaintiff Bradley Sostack in his complaint for failing to provide details.
The Ripple attorneys said:
Plaintiff’s Consolidated First Amended Complaint (FAC) attempts to resuscitate these claims, but fails because Plaintiff still has not alleged with particularity “how” and “why” the alleged misrepresentations are false. Plaintiff’s Fraud Claims should again be dismissed, this time with prejudice.
The lead plaintiff Bradley Sostack filed the complaint in the California Court with seven claims against Ripple and Brad Garlinghouse including unregistered offer and sale of securities and fraud claims against the defendants alleging that they made false or misleading statements regarding the virtual currency XRP. The lawsuit alleges that in a few instances the company promoted its token as a “utility” token.
Ripple’s attorneys argued that the plaintiff has failed to provide evidence based on the Federal Rule of Civil Procedure 9(b) and explain “how” or “why” the claims made by the company and its CEO were fraudulent.
The attorneys noted in the court filing:
Rule 9(b) requires plaintiffs alleging fraud to “state with particularity the circumstances constituting fraud…A plaintiff who successfully identifies the “who, what, when, where, and how” of a statement, without more, has not satisfied Rule 9(b).
But these alleged misrepresentations fail to satisfy Rule 9(b) because Plaintiff does not (and cannot) explain how and why these statements are false.
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