In a Dogecoin lawsuit, Elon Musk is accused of insider trading
Investors accusing the CEO of Tesla Inc. of manipulating the cryptocurrency Dogecoin and losing them billions of dollars have filed a proposed class action lawsuit charging Elon Musk of insider trading.
Investors claimed Musk utilized numerous Dogecoin wallets that he or Tesla owns to trade profitably at their cost in a Wednesday night petition in Manhattan federal court. The investors said Musk used hired internet influencers, Twitter tweets, his appearance on NBC’s “Saturday Night Live” in 2021, and other “publicity stunts” to do so.
Investors said that this included when Musk sold roughly $124 million worth of Dogecoin in April after switching the Twitter blue bird logo for the Shiba Inu dog logo, which caused Dogecoin’s price to increase by 30%.
According to the lawsuit, Musk used a “deliberate course of carnival barking, market manipulation, and insider trading” to deceive investors and promote himself and his businesses.
Last October, Musk purchased Twitter. In addition, he is the CEO of Tesla and SpaceX, two companies that build rockets and spacecraft.
Musk and Tesla’s attorney, Alex Spiro, refused to comment on Thursday. Requests for response from the investors’ lawyer were not immediately returned.
Investors have charged Musk, the second-richest person in the world according to Forbes magazine, of purposefully inflating Dogecoin’s price by more than 36,000% over the course of two years before allowing it to fall.
In a third suggested amended complaint in a case that was started in June, they submitted their most recent allegations.
In March, Musk and Tesla requested that the second revised lawsuit be dismissed because it was a “fanciful work of fiction,” and on May 26, they claimed that a further modification was unwarranted.
U.S. District Judge Alvin Hellerstein said on Wednesday that he would “likely” approve the third amended lawsuit since the defendants would not likely suffer harm.
In addition, Hellerstein approved the investors’ request to have the Dogecoin Foundation dropped as a defendant. Seth Levine, its attorney, referred to the dismissal as “the appropriate result.”
Johnson v. Musk et al., U.S. District Court, Southern District of New York, No. 22-05037, is the matter at hand.
