A class action lawsuit filed against Elon Musk by investors in Dogecoin (DOGE), accuses the billionaire of insider trading. It also accuses him of manipulation and fraud.
Musk facing new accusations
An amazing turn of events has occurred in the ongoing lawsuit against Elon Musk related to his Dogecoin trades.
A group of DOGE investors is now accusing the billionaire of manipulative practices that affected the price of the much-hyped meme cryptocurrency.
In a new motion filed May 31 in the U.S. District Court for the Southern District of New York, the investors allege that Musk used his prominent social media presence, particularly on Twitter, and public appearances, such as on Saturday Night Live on NBC in May 2021, to profit from DOGE transactions through what they call “blatant manipulation of the cryptocurrency market.”
The document outlines a number of other examples that the plaintiffs say are evidence of market manipulation.
One concerns Musk’s May 2021 tweet, in which he shared a meme showing two screenshots from the Matrix movie. The first shows actor Keanu Reeves as Neo, with the caption “Are you trying to tell me I can make a lot of money with Dogecoin?” and the second with actor Laurence Fishburne as Morpheus, but with a cartoon Shiba Inu superimposed over his face and the text “No, Neo. I’m telling you Dogecoin is money.”
The attacks are endless
Prosecutors allege that Musk, often referred to as “Dogefather” or “CEO of Dogecoin,” enriched himself “fraudulently by billions of dollars” through “undisclosed Dogecoin sales based on insider information.”
According to the documents, Musk caused the price of DOGE to rise by 30% after he replaced the existing Twitter logo with the Dogecoin logo for three days in April this year.
The investors are also seeking court approval to modify the complaint to include allegations of Musk’s activities as an “insi dera” in the case of DOGE. They also reiterate the claim that the meme currency meets the criteria for a security under US Securities and Exchange Commission standards.
“We are filing a class action securities fraud lawsuit stemming from deliberate market manipulation and insider trading by the world’s richest man, Elon Musk, who is taking advantage of the growing interest in mass culture to promote himself and his companies while profiting from the naive hopes of vulnerable Americans, including veterans, blue-collar workers and the elderly.” – reads the filing.
Strong line of defense
The initial $258 billion class action lawsuit was filed in June 2022. It has since gone through two amendments.
In March of this year, the CEO of Tesla and SpaceX tried to dismiss the lawsuit, with the billionaire’s lawyers arguing that “the court should put an end to the plaintiffs’ fantasies and dismiss the complaint.”
“Writing supportive words on Twitter or sharing funny pictures about a legitimate cryptocurrency that has a market capitalization of nearly $10 billion does not violate any laws,” – Musk’s lawyers stated.
In addition, they also rejected investors’ claim that Dogecoin should be considered a security, arguing that the plaintiffs’ claims are based on nothing more than “mere rhetoric.”
