Elon Musk and his electric vehicle company, Tesla Inc., have successfully dismissed a federal lawsuit that accused them of defrauding investors. The lawsuit alleged that Musk and Tesla manipulated the meme cryptocurrency Dogecoin, engaging in insider trading and price manipulation to profit at the expense of investors.
The decision was delivered by U.S. District Judge Alvin Hellerstein in Manhattan on Thursday evening. The investors had claimed that Musk used his Twitter (now X) posts, a 2021 appearance on NBC’s “Saturday Night Live,” and other publicity stunts to manipulate Dogecoin’s price. They alleged that Musk controlled several DOGE wallets and timed trades to coincide with his public statements and activities concerning the memecoin.
The investors also claimed that Musk intentionally inflated DOGE’s price by over 36,000% in two years before letting it crash. However, Judge Hellerstein ruled that no reasonable investor could rely on Musk’s tweets to pursue a securities fraud claim. He also stated that the investors’ allegations of market manipulation and insider trading were not possible to understand.
The lawsuit was dismissed with prejudice, meaning it cannot be refiled. The investors had initially sought $258 billion in damages and had revised their complaint four times over the past two years.
Dogecoin’s price movement has become increasingly linked to social posts and endorsements by Elon Musk. Earlier this month, Musk posted an AI-generated image referencing the cryptocurrency on his X account, which caused a price spike. Last month, he reaffirmed his fondness for Dogecoin in an appearance on the X Takeover podcast, citing his love for dogs and memes as reasons.
At the time of writing, DOGE was trading at $0.1002, down slightly from the previous day. Tesla shares closed at $206.28, up 0.26% during Thursday’s trading session.
