It has been reported that the filers are calling upon new Acting Chairman Elad Roisman to alter the course that his predecessor, Jay Clayton, set by beginning enforcement against Ripple just before his departure.
However, in response to what it calls “the most significant SEC enforcement action in modern history,” the Friday filing is a petition for a “writ of mandamus.” A “mandamus” is just an order that a public official, in this case, the chairman of the SEC, does their job.
The petitioners argue that the SEC’s action operates in defiance of its statutory mandate to protect investors.
“Instead of protecting investors and sharing information to help investors make informed decisions, as required by the mission statement, the Respondent knowingly and intentionally caused multi-billion-dollar losses to innocent investors who have purchased, exchanged, received and/or acquired the Digital Asset XRP, including the named Petitioners, and all others similarly situated.”
Likewise, the XRP investors have filed their case in Rhode Island, while the Ripple case is happening in the Southern District of New York.
XRP investors, who have seen the value of their holdings collapse, strike back against what they call "the most significant SEC enforcement action in modern history." https://t.co/h2YGixNxMI — Cointelegraph (@Cointelegraph) January 4, 2021
The report said that the SEC initially filed its case against Ripple on December 22 after many months of investigation into Ripple’s longstanding sale of XRP, which began in 2013. The petition from investors takes issue with the SEC’s timeframe in filing this action and further looks to set up a contrast between Ripple’s XRP and that owned by investors.
They further added:
“It’s not just legally wrong and intellectually dishonest, but it is absurd to call the XRP held by thousands of innocent investors, who have absolutely no connection to Ripple or its executives’ securities.”
The aim of the petition is to get the court to order the SEC “to amend its complaint against Ripple to exclude the claim that the XPR owned by Petitioners constitute securities.”
Thus, XRP’s value has collapsed since the SEC begins its enforcement. Many exchanges have announced that they are suspending or delisting XRP, which has led to a liquidity crisis for holders.