Elon Musk and his electric vehicle company, Tesla Inc. TSLA, have won the dismissal of a federal lawsuit accusing them of defrauding investors through insider trading and manipulating the meme cryptocurrency Dogecoin DOGE/USD.
What Happened: As reported by Reuters, the decision was delivered on Thursday night by U.S. District Judge Alvin Hellerstein in Manhattan. Investors had accused Musk of exploiting Twitter (Now X) posts, a 2021 appearance on NBC’s “Saturday Night Live”, and other publicity stunts to trade profitably at their expense through several DOGE wallets controlled by him or Tesla.
Investors also claimed Musk intentionally inflated DOGE’s price by over 36,000% in two years before letting it crash, with he and Tesla often timing trades to coincide with Musk’s public statements and activities concerning the memecoin.
Judge Hellerstein stated that no reasonable investor could rely on the tweets to pursue a securities fraud claim. He also found it “not possible to understand” the investors’ market manipulation and insider trading allegations. The lawsuit was dismissed with prejudice, preventing it from being filed again. The investors initially sought $258 billion and revised their complaint four times in two years.
Why It Matters: Over the years, DOGE’s price movement has become increasingly linked to social posts and endorsements by Musk, as well as developments around companies owned by him.
Earlier this month, Musk posted an AI-generated image referencing the cryptocurrency through his X account, which caused it to spike.
Musk reaffirmed his affinity for the meme coin in an appearance on the X Takeover podcast last month, saying that he has got a soft spot for Dogecoin because of his fondness toward dogs and memes.
Price Action: At the time of writing, DOGE was little changed, trading at $0.1002 after a 0.13% drop in the last 24 hours, according to data from Benzinga Pro. Shares of Tesla closed 0.26% higher at $206.28 during Thursday’s regular trading session.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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