Elon Musk and Tesla dismiss lawsuit alleging they manipulated Dogecoin
Elon Musk and his electric car company Tesla have dismissed a federal lawsuit accusing them of defrauding investors by promoting the cryptocurrency Dogecoin and engaging in insider trading, leading to billions of dollars in losses.
The decision was made Thursday evening by U.S. District Judge Alvin Hellerstein in Manhattan.
Investors accused the world’s richest person of using Twitter posts, a 2021 appearance on NBC’s “Saturday Night Live” and other publicity stunts to make profitable trades at their expense through various Dogecoin wallets controlled by him or Tesla.
They also said that Musk intentionally drove up the price of Dogecoin by over 36,000% over two years and then crashed it. He and Tesla often based their trades on Musk’s public statements and activities regarding Dogecoin.
Investors said this was also the case when Musk sold Dogecoin in April 2023 after replacing Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo, sending Dogecoin’s price soaring 30 percent.
However, Hellerstein said that Musk’s tweets saying Dogecoin was the Earth’s future currency and that it could be used to buy Teslas or that his company SpaceX could literally fly to the moon with it were “ambitious and bombastic, not factual and open to counterfeiting.”
The judge said this meant that no reasonable investor could rely on the tweets to bring a securities fraud claim. He also said it was “not possible to understand” the investors’ claims of market manipulation and insider trading.
Hellerstein dismissed the lawsuit with prejudice, meaning it cannot be refiled. Investors originally sought $258 billion (roughly Rs. 20,544 crore) and had amended their complaint four times in two years.
Lawyers for the investors did not immediately respond to requests for comment.
Musk’s lawyer Alex Spiro said in an emailed statement: “It’s a very good day for Dogecoin.”
In their request for dismissal, Musk’s lawyers said there was nothing wrong with his “innocent and often stupid tweets.”
They also said there was no evidence that Musk owned two wallets for suspicious trading, or that he or Tesla ever sold Dogecoin.
Musk called Dogecoin a “crazy thing” on “Saturday Night Live” and played a fictional financial expert in a segment on “Weekend Update.”
Musk bought Twitter in October 2022 and changed its name to X. According to Forbes magazine, he is worth $239.3 billion (approximately Rs.18,744 crore).
The case is Gorog et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.
© Thomson Reuters 2024
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