Musk and Tesla win lawsuit, dismissing allegations of Dogecoin manipulation and insider trading

ChainCatcher news, according to a report by Reuters, Elon Musk and his electric vehicle company Tesla (TSLA.O) have successfully won the dismissal of a federal lawsuit that accused them of defrauding investors by exaggerating the value of the cryptocurrency Dogecoin and engaging in insider trading, resulting in billions of dollars in losses. U.S. District Judge Alvin Hellerstein in Manhattan issued this ruling on Thursday evening.

Investors accused the world's richest man of profiting from trades at their expense through Twitter posts, an appearance on NBC's "Saturday Night Live" in 2021, and other promotional stunts, using multiple Dogecoin wallets controlled by him or Tesla. They also claimed that Musk deliberately inflated the price of Dogecoin by over 36,000% over two years, only to let it crash, while he and Tesla often timed their trades based on Musk's public statements and activities regarding Dogecoin.

However, Hellerstein stated that Musk's tweets about "Dogecoin being the currency of the future on Earth, usable to purchase Tesla cars, or sent to the moon by his company SpaceX" were "idealized and exaggerated, not facts, and easily falsifiable," meaning that no rational investor could rely on these tweets to file a securities fraud lawsuit, and thus "could not comprehend" the market manipulation and insider trading allegations raised by the investors. Hellerstein dismissed the lawsuit with prejudice, meaning it cannot be refiled. The investors initially sought $258 billion in damages and amended their complaint four times over two years. In seeking to dismiss the lawsuit, Musk's lawyers argued that his "harmless and often silly tweets" posed no issue. They also stated that there was no evidence that Musk owned two wallets for suspicious trading, nor was there evidence that he or Tesla had ever sold Dogecoin.