Elon Musk was accused of insider trading in a class action lawsuit brought by a group of investors, who accuse the CEO of Tesla Inc of manipulating the Dogecoin cryptocurrency, costing them billions of dollars.
In a lawsuit filed Wednesday in federal court in Manhattan, investors say Musk used Twitter messages, paid “influencers,” his 2021 appearance on NBC’s “Saturday Night Live” and other “publicity stunts” to profitably trade at his expense through various Dogecoin wallets that he or Tesla controls.
Investors said this included when Musk sold around $124 million worth of Dogecoin in April after he replaced Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo., which led to a 30% jump in the price of Dogecoin. Musk bought the social network in October.
Musk defrauded investors and promoted himself and his companies thanks to a “market manipulation and insider trading,” according to the complaint.
Alex Spiro, Musk’s attorney, declined to comment Thursday. An attorney for Tesla did not immediately respond to a request for comment, while an attorney for the investors did not immediately respond to a separate request.
Investors have accused Musk, the world’s second-richest person according to Forbes magazine, of deliberately driving the price of Dogecoin up more than 36,000% in two years and then letting it crash.
They included their latest allegations in a proposed third amended lawsuit, in a lawsuit that began in June 2022.
Musk and Tesla had filed for dismissal of the second amended lawsuit in March, calling it a “work of fanciful fiction,” and on May 26 said another amendment was unwarranted.
In an order entered Wednesday, U.S. District Judge Alvin Hellerstein said he would “probably” allow the third amended complaint, saying the defendants would probably not be harmed.
Source: Ambito
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