US court dismisses a lawsuit against Elon Musk for manipulation and insider trading of DOGE

What’s new? Elon Musk and his electric car company Tesla have won a dismissal of a lawsuit accusing them of manipulating the Dogecoin (DOGE) exchange rate and insider trading, which allegedly caused billions of dollars in losses to investors. The judgment was handed down by Alvin Hellerstein in a Manhattan court.

Material by Reuters

What else is known? The lawsuit was filed by investor Keith Johnson in June 2022. At that time, the plaintiff requested $258 billion in damages and an injunction against the defendants’ promotion of the asset. In September, several other investors joined the case. All of them claimed that DOGE has no intrinsic value and its rate depends solely on promotion, while Musk claimed the opposite, thus misleading investors.

The billionaire was accused of promoting the coin in various ways, including using his X account and an invitation to the Saturday Night Live program on NBC in 2021, while conducting profitable trading of the asset through Tesla-controlled wallets. The lawsuit also claimed that Musk contributed to the growth of DOGE’s rate by more than 36 000% in two years and then initiated its fall.

Thus, in June 2023, the lawsuit was supplemented by allegations that Musk sold DOGE for $124 million, having previously stimulated the growth of the asset by 68%. The case in question here was a case in April 2023 when the entrepreneur temporarily swapped the logo of the social network he owned X for the DOGE mascot, which led to a spike in the exchange rate. In just two years, the investors amended the claim four times.

The defense side has denied all the allegations, citing a lack of evidence, and including proof that Musk or Tesla ever sold Dogecoin in the first place. In August, lawyers claimed “abusive and aggressive trial tactics” and filed a motion to dismiss the lawsuit.

According to Judge Hellerstein, Musk’s tweets that Dogecoin was the currency of the future and could be used by his companies were not facts amenable to falsification. Moreover, the judge noted that investors’ claims of market manipulation and insider trading are impossible to understand, and rational investors cannot rely on tweets in a securities fraud case.

He dismissed the lawsuit so that it cannot now be refiled.