Elon Musk accused of insider trading by dogecoin investors
Tesla CEO Elon Musk is facing accusations of insider trading in a class action lawsuit filed by investors who claim he manipulated the price of the cryptocurrency dogecoin, resulting in billions of dollars in losses for them. According to the investors who filed the lawsuit, Musk used Twitter, paid online influencers, and publicity stunts, including his appearance on NBC’s “Saturday Night Live” in 2021, to trade profitably through several dogecoin wallets controlled by him or Tesla. The suit accuses Musk of engaging in a “deliberate course of carnival barking, market manipulation and insider trading,” that allowed him to defraud investors and promote himself and his companies.
The lawsuit includes allegations that Musk sold around $124 million of dogecoin in April, after he replaced Twitter’s blue bird logo with dogecoin’s Shiba Inu dog logo, causing a 30% jump in the price of dogecoin. The suit also claims that Musk deliberately drove up dogecoin’s price over two years by more than 36,000% and then let it crash, resulting in significant losses for investors.
Musk, who is the world’s second-richest person according to Forbes magazine, has not publicly commented on the accusations, and a lawyer for Tesla did not immediately respond to a request for comment. However, in March, Musk and Tesla sought the dismissal of the second amended complaint, calling it a “fanciful work of fiction.”
A US district judge has said he is likely to allow the third amended complaint from the investors, and granted their request to dismiss the nonprofit Dogecoin Foundation as a defendant, which its lawyer called “the appropriate result.”
What is dogecoin?
Dogecoin is a type of cryptocurrency that was created as a joke in 2013. It is named after the “Doge” internet meme, which features a Shiba Inu dog.
What is insider trading?
Insider trading is buying or selling securities, such as stocks or shares in a company, based on confidential or non-public information. It is illegal and violates securities laws.
What is a class action lawsuit?
A class action lawsuit is a legal action in which a group of people with a common complaint or injury sue one or several defendants collectively. Class actions are commonly used in cases where many people have been harmed by the same actions of a company or individual.
What is Elon Musk’s involvement with dogecoin?
Elon Musk has been a vocal supporter of dogecoin on social media, and his tweets and comments have sometimes resulted in significant price movements for the cryptocurrency. He has also referred to himself as the “Dogefather” and once described dogecoin as the “people’s crypto.”
Dogecoin investors accuse Elon Musk of insider trading
Tesla CEO Elon Musk is facing a proposed class action lawsuit filed by investors accusing him of insider trading and manipulating the cryptocurrency Dogecoin, which they claim has cost them billions of dollars. According to documents filed in Manhattan federal court on Wednesday night, the investors allege that Musk used Twitter posts, paid online influencers, his appearance on NBC’s “Saturday Night Live,” and other publicity stunts to trade profitably at their expense through several Dogecoin wallets that he or Tesla controls.
The investors claim that Musk’s actions included selling about $124 million of Dogecoin in April, shortly after he replaced Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo, leading to a 30% jump in Dogecoin’s price. The lawsuit alleges that a deliberate course of carnival barking, market manipulation, and insider trading enabled Musk to defraud investors, promote himself and his companies, and profit at their expense.
Musk, who is also the founder of SpaceX, a rocket and spacecraft manufacturer, has been accused of deliberately driving up Dogecoin’s price more than 36,000% over two years and then letting it crash. In response to the lawsuit, Alex Spiro, a lawyer for Musk, declined to comment, while a lawyer for Tesla did not immediately respond to a request for comment. The investors’ lawyer also did not immediately respond to a separate request.
The investors included their latest accusations in a proposed third amended complaint in a lawsuit that began last June. Musk and Tesla had previously sought a dismissal of the second amended complaint, calling it a “fanciful work of fiction.” However, in a Wednesday order, US District Judge Alvin Hellerstein said he would “likely” allow the third amended complaint.
Hellerstein also granted the investors’ request to dismiss the nonprofit Dogecoin Foundation as a defendant in the case. Its lawyer Seth Levine called the dismissal “the appropriate result.” Musk, who is the world’s second-richest person according to Forbes magazine, has yet to publicly address the latest accusations levied against him.