• A U.S. court dismissed a lawsuit against Elon Musk and Tesla, accusing them of manipulating Dogecoin’s price through public statements.
  • The judge ruled that Musk’s tweets about Dogecoin were “aspirational” and not factual, rejecting claims of securities fraud.
  • Plaintiffs failed to provide sufficient evidence for market manipulation or insider trading by Musk or Tesla.

Elon Musk and his electric vehicle company, Tesla, secured a major legal victory on Thursday night when the U.S. District Court in Manhattan dismissed a high-profile case accusing them of manipulating the cryptocurrency Dogecoin. 

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JUST IN: Elon Musk wins dismissal of lawsuit claiming he rigged Dogecoin and conducted insider trading. pic.twitter.com/0t2Zo82rYX

— Watcher.Guru (@WatcherGuru) August 29, 2024

The plaintiff is a group of DOGE investors. They claimed that Musk and Tesla engaged in a premeditated plan to inflate the memecoin’s value through deceptive statements and insider trading which resulted in financial losses for traders.

Allegations of market manipulation and insider trading

The lawsuit accused Musk of using his influential Twitter platform and a 2021 appearance on NBC’s ‘Saturday Night Live’ to artificially inflate Dogecoin’s price. They claimed that the public comments and tweets made by Elon Musk generated a false sense of confidence in Dogecoin which resulted in its price soaring by more than 36,000% in just two years. 

They accused Musk and Tesla of engaging in coordinated trades using wallets controlled by them to maximize profits at the expense of normal investors.

The Final Judgment

U.S. District Judge Alvin Hellerstein dismissed the case with prejudice, prohibiting the plaintiffs from pursuing it again. In his decision, Judge Hellerstein stated that Musk’s tweets and public pronouncements about Dogecoin were aspirational and puffery, rather than real claims that might be proven wrong. 

The judge highlighted that no reasonable investor could use such comments to bring a securities fraud lawsuit. Furthermore, the court determined that the investors did not submit adequate evidence to substantiate their claims of market manipulation and insider trading. 

Musk’s Legal Team responds

Musk’s legal team maintained that his often funny and exaggerated tweets were part of his persona, not premeditated attempts to deceive investors. They also argued that the plaintiffs’ claims were hypothetical and lacked the required evidence to show that Musk or Tesla engaged in any illegal trading.

The dismissal of the Dogecoin manipulation lawsuit is a significant victory for Elon Musk and Tesla, insulating them from future legal ramifications from their engagement with the cryptocurrency. 

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