Elon Musk successfully had a lawsuit dismissed, which alleged that they manipulated the value of Dogecoin.
Elon Musk and his electric vehicle company, Tesla, successfully had a federal lawsuit dismissed that accused them of defrauding investors by promoting the cryptocurrency dogecoin and engaging in insider trading, which allegedly resulted in billions of dollars in losses.
The ruling was made on Thursday evening by U.S. District Judge Alvin Hellerstein in Manhattan.
Investors claimed that Musk, the wealthiest individual globally, utilized Twitter posts, a 2021 appearance on NBC's "Saturday Night Live," and various publicity events to profit from dogecoin trades at their expense through multiple wallets controlled by him or Tesla.
They alleged that Musk intentionally inflated dogecoin's value by over 36,000% within two years, only to allow it to plummet, often synchronizing trades with his public comments and actions related to dogecoin.
One instance cited was Musk's sale of dogecoin in April 2023, following the replacement of Twitter's blue bird logo with the dogecoin Shiba Inu logo, which led to a 30% surge in dogecoin's price.
However, Judge Hellerstein stated that Musk's assertions on Twitter regarding dogecoin being the future currency of Earth and its potential use for purchasing Teslas or being sent to the moon by SpaceX were "aspirational and puffery, not factual and susceptible to being falsified."
The judge concluded that no reasonable investor could depend on these tweets to substantiate a securities fraud claim. He also remarked that the investors' allegations of market manipulation and insider trading were "not possible to understand."
Hellerstein dismissed the lawsuit with prejudice, preventing it from being refiled. The investors initially sought $258 billion and had revised their complaint four times over two years.
Legal representatives for the investors did not provide immediate comments.
Musk's attorney, Alex Spiro, stated in an email: "It's a very good day for dogecoin."
In their motion for dismissal, Musk's legal team argued that there was nothing inappropriate about his "innocuous and often silly tweets."
The defendants asserted that there was no evidence to support the claim that Musk possessed two wallets for engaging in questionable trading practices, nor was there any indication that he or Tesla had ever sold dogecoin.
During his appearance on "Saturday Night Live," Musk referred to dogecoin as a "hustle" while portraying a fictional financial expert in a segment of "Weekend Update."
Musk acquired Twitter in October 2022 and subsequently rebranded it as X. According to Forbes magazine, his net worth stands at $239.3 billion.
The case is identified as Gorog et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.