Ripple's Chief Legal Officer Stuart Alderoty publicly criticized SEC Chairman Gary Gensler, pointing to a recent court ruling as evidence of regulatory overreach. Alderoty highlighted that the SEC, under Gensler's direction, unlawfully rescinded a rule regarding proxy advisory firms without adhering to the Administrative Procedure Act.

In a statement on X, Alderoty said, "Another court slams the SEC. This time for unlawfully rescinding a rule on proxy advisory firms without adhering to the Administrative Procedure Act. The court explains that Gensler personally directed this illegal move. National Association of Manufacturers v. SEC."

Alderoty shared a screenshot from the ruling, which detailed how the SEC, directed by Gensler, began the process to rescind the rule in June 2021, soon after Gensler took office. The court found the SEC's process for rescinding the rules to be "arbitrary and capricious and therefore unlawful," criticizing the agency for insufficient justification.

The court ruling, from the 5th US Circuit Court of Appeals, struck down the SEC’s rollback of 2020 rules designed to ensure transparency and accountability in proxy voting advice. These rules required proxy firms to notify companies of their voting advice simultaneously as their clients and provide a response mechanism.

Despite Gensler's June 2021 defense of the rollback as a means to promote timeliness and independence in proxy voting advice, the court questioned the SEC's procedural and rational justifications. The SEC is currently reviewing the court’s decision and determining its next steps.

Alderoty also recently criticized Gensler on X after Gensler's interview remarks about recent court rulings, stating, "Note to Gary Gensler: The courts aren’t 'adjusting'…they are finding that you are breaking the law by exceeding your statutory authority."

At press time, XRP traded at $0.47244.