Court Clears Elon Musk and Tesla of Dogecoin Manipulation Claims
A court lawsuit alleging Elon Musk and his electric vehicle manufacturer, Tesla, of manipulating the price of Dogecoin was successfully rejected. Investors filed the case in June 2022, claiming that Musk’s social media influence including his tweets and public appearances manipulated the value of the cryptocurrency, causing investors to suffer large financial losses.
According to court records, US District Judge Alvin Hellerstein rendered a decision in the case on August 29 in Manhattan. The plaintiffs demanded $258 billion in damages, alleging that Musk had engaged in insider trading to profit from the deliberate sale of Dogecoin at times when there was a surge in public interest brought on by his marketing efforts.
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Court Ruling on Dogecoin Manipulation Claims
The plaintiffs contended that Musk misled investors with a number of public endorsements, including tweets and statements, in order to influence the Dogecoin market. Judge Hellerstein, however, rejected these accusations, saying that Musk had made “aspirational and puffery, not factual and susceptible to being falsified” comments in his tweets. The court dismissed the accusations of fraud and market manipulation, ruling that no reasonable investor could construct a securities fraud claim on these tweets.
Musk’s defense team contended that the plaintiffs had misunderstood Musk’s intentions and conduct, calling the complaint and the $258 billion damages claim a “fanciful work of fiction.”
The distinction between actionable securities fraud and promotional remarks is highlighted by the court’s ruling, particularly in the unpredictable cryptocurrency market.
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