I think the result is not too bad for Ripple. The securities case is not dismissed but even in case the plaintiff can eventually win the case and claim a liability, the amount that the plaintiff can claim is severely restricted which would suggest a strong incentive to settle as far as the plaintiff is concerned.
From the document:
"Significantly, as plaintiff pointed out at oral arguments its 129,000 XRP unit purchase during 2018 Q1, when compared to defendants sale of 0.095 percent of the XRP traded on the market that quarter, supports the inference that plaintiff purchased approximately 122 XRP units from defendant (or approximately 19 XRP units, discounting for plaintiff’s two week trading period and reasonably assuming uniform distribution of sale by defendant during that period).
This conclusion is further supported by the more glaring (but largely unaddressed) issue presented by this claim—namely, to what extent may defendants be considered in privity with an exchange purchaser when a subsequent purchase qualifies as part of an issuer transaction under § 25011. In any event, at this stage in the litigation, where the court may draw reasonable inferences and the relationship between defendants, subsequent purchasers,and the exchange isunclear, the court concludes that plaintiff has adequately alleged privity in support of his § 25503 claim, though he may ultimately be unable to prove it."
"As a preliminary matter, plaintiff suggests that Rule 9(b) does not necessarily apply to his claims for violation of § 25401because they might sound in negligence (as opposed to fraud). Dkt. 74 at 27. Plaintiff fails to develop that potential distinction. In any event, because Rule 9(b) applies to negligent misrepresentation claims,9plaintiff’s underdeveloped suggestion to the contrary is misplaced.As a result, the court applies Rule 9(b) to plaintiff’s § 25501 and § 25504.1 claims for violation of § 25401. Here, plaintiff failed to satisfy Rule 9(b)’s heightened pleading standards with respect to defendants’ allegedly fraudulent misstatements.
"“Similarly, on or about December 21, 2017, Ripple tweeted in Japanese that XRP was now available on over 50 exchanges. That tweet linked to an article on Ripple’s website which described XRP as ‘the fastest and most scalable [digital] asset on the market.’It continued, ‘[t]he market is taking notice of XRP’s speed, reliability and scalability —which has strengthened the demand for XRP and whereit’s listed. In fact, we’re proud to announce that XRP has gone from being listed on six exchanges earlier this year to more than 50 worldwide.’The article also linked to a number of exchanges where XRP could be purchased, and stated that ‘XRP’s long-term value is determined by its utility—including its ability to help financial institutions source liquidity for payments into and out of emerging markets.’” Id.¶ 45. Here, plaintiff fails to explain how or why the above statement is false. As a result, the misstatement alleged above fails Rule 9(b)."
"Various statements (mostly tweets) by defendants on specified dates concerning public interest in XRP (Compl. ¶ 63), advantages over Bitcoin (id.¶ 64), the growth and potential value of XRP (id.¶¶ 65-66), the future use of XRP by American Express, the Japan Bank Consortium, as well as other “banks and payment providers” (id.¶¶ 67, 68, 73), how XRP is more than “bank software”(id.¶ 74), a partnership with MoneyGram (id.¶¶ 102-103), defendants’ intent to develop the infrastructure necessary for banks to directly use XRP (id.¶ 102), and how XRP’s value depends upon the XRP Ledger’s use for cross-border payments as well as its adoption by enterprises (id.¶ 149).Again, plaintiff fails to explain how or whyany of the misstatements alleged in the above paragraphs are false. In their motion, defendants challenged the sufficiency of variousof these alleged misstatements. Dkt. 70 at 31. Plaintiff failed to respond to such challenges. Dkt. 74 at 27-28. As a result, the misstatements alleged at paragraphs 63-68, 70, 73-74, 102-03, and 149 all fail Rule 9(b)"