Elon Musk has been accused of insider trading by investors who alleged that he manipulated the price of the cryptocurrency Dogecoin, causing them to lose billions of dollars.
CNCB reports that in a proposed class action lawsuit, investors who claim that Elon Musk manipulated the cryptocurrency Dogecoin and caused them to lose billions of dollars have accused him of insider trading.
The investors assert that Musk traded profitably at their expense through several Dogecoin wallets that he or Tesla allegedly control. The investors further argue that Musk’s comments about Dogecoin, including multiple Twitter posts and his 2021 appearance on NBC’s Saturday Night Live, were part of a “deliberate course of carnival barking, market manipulation, and insider trading” that allowed Musk to defraud investors and promote himself and his companies.
In one notable incident mentioned in the lawsuit, Musk sold about $124 million worth of Dogecoin in April after switching Twitter’s blue bird logo to Dogecoin’s Shiba Inu dog logo. Dogecoin’s price increased by 30 percent as a result of this action.
Investors claim that Musk, who just regained the title as world’s richest man, purposefully inflated Dogecoin’s price by more than 36,000 percent over the course of two years before allowing it to crash, enabling Musk to defraud investors, promote himself and his companies.
In March, Musk and Tesla requested that the second amended complaint be dismissed because it was a “fanciful work of fiction,” and on May 26, they claimed that a subsequent amendment was unjustified.
U.S. District Judge Alvin Hellerstein announced on Wednesday that he would “likely” allow the third amended complaint because the defendants would not likely suffer harm. In addition, Hellerstein granted the investors’ request to have the Dogecoin Foundation dropped as a defendant. Seth Levine, its attorney, referred to the dismissal as “the appropriate result.”
Musk and Tesla’s attorney, Alex Spiro, declined to comment on Thursday. Requests for comment from the investors’ lawyer were not immediately returned.
The case is Johnson et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan