SUMMARY
- In 2022, a group of investors claimed Elon Musk and his company manipulated Dogecoin’s price using their Twitter accounts.
- A Manhattan judge dismissed the lawsuit, stating that Musk’s influence and public statements didn’t amount to market manipulation.
- The judge ruled that Musk’s statements were “aspirational and puffery,” and no reasonable investor would take them as factual claims.
Elon Musk and Tesla emerged triumphant in a noteworthy class action claim filed against them in 2022, where they were accused of manipulating the market for Dogecoin, a well-known cryptocurrency. U.S. District Judge Alvin Hellerstein permanently dismissed the lawsuit on Thursday, expressing that the claims against Musk and his electric vehicle company needed adequate legal grounds. This decision brings a decisive conclusion to the legal battle that alleged Musk’s social media actions, especially on Twitter, had artificially impacted Dogecoin’s value, deceiving investors and causing them financial harm.
The lawsuit was started in June 2022 by a group of investors who claimed that Musk and his companies, Tesla and SpaceX, engaged in false exercises related to Dogecoin. The investors contended that Musk’s high-profile statements around Dogecoin, including claims of becoming the cryptocurrency’s CEO and putting Dogecoin on a SpaceX mission to the moon, were deceptive and led to considerable financial losses for those who invested in the cryptocurrency based on his comments. Be that as it may, Judge Hellerstein concluded that these statements were nothing more than “aspirational and puffery,” and not factual statements that could deceive a sensible investor.
Hellerstein’s ruling emphasized that Musk’s comments were too unclear and promotional to be considered authentic market manipulation. The judge expressed that no levelheaded investor would depend on such exaggerated statements when making money-related choices. Besides, the allegations that Musk and Tesla were involved in a “pump and dump” conspiracy or had breached fiduciary obligations through insider trading were rejected as unfounded and difficult to substantiate. Hellerstein found the arguments displayed by the plaintiffs to be legally inadequate, leading to the dismissal of the case with prejudice, meaning it cannot be refiled.
Despite the legal turmoil, Dogecoin, which remains the ninth-largest cryptocurrency by market capitalization, saw a minor plunge of 1.2% following the ruling, trading at around $0.10. Its market capitalization stood at around $14.6 billion. Musk’s impact on Dogecoin has been a subject of contention, with a few market observers crediting him for the cryptocurrency’s brilliant rise in 2021. However, this lawsuit’s result fortifies the thought that Musk’s public statements, no matter how impactful, are often promotional and not aiming to be taken as financial advice.
In the judgment, Hellerstein ordered the dismissal of the Fourth Amended Complaint with prejudice, successfully closing the case. The ruling moreover instructed the court clerk to enter judgment in favor of the defendants, Elon Musk, Tesla, and SpaceX, and to end all open motions. This lawful triumph marks another instance where Musk’s controversial and frequently provocative open persona withstands scrutiny, leaving investors and market watchers to consider the fine line between hype and actionable financial guidance in the world of cryptocurrencies