Lawsuit Alleges Elon Musk Engaged in Insider Trading with Dogecoin

Elon Musk has been accused of insider trading in a proposed class action lawsuit in which investors accuse the Tesla Inc. CEO of manipulating the cryptocurrency Dogecoin, costing them billions of dollars.

In a lawsuit filed Wednesday night in Manhattan federal court, investors said Musk used Twitter posts, paid online influencers, his 2021 appearance on NBC’s “Saturday Night Live” and other “hype business” to profitably trade their accounts through multiple From Dogecoin wallets. Tesla controllers.

Investors said this also included Musk selling about $124 million worth of Dogecoin in April after he replaced Twitter’s Blue Bird logo with Dogecoin’s Shiba Inu logo, leading to a 30 percent spike in Dogecoin’s price.

According to the report, “deliberate carnival barking, market manipulation and insider trading” allowed Musk to deceive investors and promote himself and his companies.

Musk bought Twitter last October. He also runs SpaceX, which makes rockets and spaceships, and Tesla, which makes electric cars.

Alex Spiro, a lawyer for Musk and Tesla, declined to comment Thursday. The investors’ lawyer did not immediately respond to requests for comment.

Investors accused Musk, who is the world’s second-richest person according to Forbes, of deliberately driving up Dogecoin’s price by more than 36,000% over two years and then letting it crash.

They included their latest allegations in a proposed third amended complaint in a lawsuit that began last June.

In March, Musk and Tesla had asked to dismiss the second amended complaint, calling it a “contrived act of contempt,” and on May 26 stated that the second amendment was not warranted.

In an order issued Wednesday, U.S. District Judge Alvin Hellerstein said he would “probably” accept the third amended complaint, saying the defendants were unlikely to be prejudiced.

Hellerstein also granted the investors’ request to remove the non-profit Dogecoin Foundation as a defendant. His attorney, Seth Levine, called the dismissal an “appropriate outcome.”

A case in point is Johnson et al. Musk et al., US District Court, Southern District of New York, No. 22-05037.