- A federal judge has dismissed the class action lawsuit against Elon Musk for alleged market manipulation through his Dogecoin endorsements
- Investors have claimed significant financial losses due to Musk’s social media comments
- The judge has rejected the allegations, dismissing the case centered on Musk’s Dogecoin statements
A federal judge has dismissed a class action lawsuit accusing Tesla CEO Elon Musk of manipulating the market through his public endorsements of Dogecoin. The lawsuit, brought by a group of investors who claimed significant financial losses due to Musk’s social media comments, sought $86 billion in damages, with the potential for triple damages totaling $258 billion. The case revolved around Musk’s various statements about Dogecoin, primarily made on X/Twitter, between 2021 and 2023, but the judge rejected the allegations.
Musk Involved in “Pyramid Scheme” With Dogecoin
The lawsuit, filed in June 2022, saw the plaintiffs argue that Musk’s bigging up of DOGE misled investors and caused them to suffer substantial financial losses. Lead plaintiff Keith Johson argued in the filing that Musk had “engaged in a crypto pyramid scheme by way of dogecoin cryptocurrency,” but US District Judge Alvin K. Hellerstein rejected these claims.
Judge Hellerstein ruled that Musk’s comments were merely “aspirational and puffery” rather than factual assertions that could be proven false and “They cannot be the basis of a lawsuit, and no reasonable investor could rely upon them.”
The class action suit was amended four times since its initial filing, perhaps explaining why it has taken so long to get to court, with Musk also accused of insider trading. The plaintiffs’ attorneys alleged that Tesla’s legal team engaged in harassment, a claim Judge Hellerstein dismissed as “unfounded and audacious.”
In his ruling, Judge Hellerstein noted that the remaining arguments from the plaintiffs were vague and lacked clarity, making it difficult to understand the basis of their claims regarding market manipulation, a “pump and dump” scheme, or insider trading.
Plaintiffs May Appeal
In response to the dismissal, the plaintiffs’ attorneys insisted that Musk’s statements were more than just “puffery” and had caused their clients to lose billions, expressing frustration that “We live in a world where the richest people like Elon Musk do whatever they want and get away with it.”
The attorneys also indicated their intention to appeal the decision, hoping the Second Circuit Court of Appeals will rule in their favor, as it has done against Musk in the past.
The lawsuit had cited Musk’s appearance on *Saturday Night Live*, where he mentioned Dogecoin during his monologue and a skit. It also referenced Musk’s declaration that he would send Dogecoin to the moon via SpaceX and fund the mission using the cryptocurrency.
