By Jonathan Stempel
NEW YORK (Reuters) – Elon Musk and his electric car company Tesla Inc won a federal lawsuit on Tuesday that accused them of defrauding investors by promoting the cryptocurrency Dogecoin and conducting insider trading that caused billions of dollars in losses.
U.S. District Judge Alvin Hellerstein in Manhattan issued the decision Thursday evening.
Investors have accused Musk of using Twitter posts, a 2021 appearance on NBC’s “Saturday Night Live” and other publicity stunts to profitably trade at their expense through multiple Dogecoin wallets controlled by him or Tesla.
According to investors, Musk intentionally drove up Dogecoin’s price by more than 36,000% over two years and then allowed it to crash, with he and Tesla often timing trades around Musk’s public statements and Dogecoin-related activities.
Investors said this included when Musk sold Dogecoin in April 2023 after he replaced Twitter’s blue bird logo, now known as the X, with Dogecoin’s dog logo, causing Dogecoin’s price to rise by 30%.
In seeking to have the lawsuit dismissed, Musk’s lawyers said the plaintiffs still had no case despite filing five versions of their lawsuit, which originally sought $258 billion, over two years.
The lawyers said there was nothing wrong with Musk’s “often innocuous and ridiculous tweets” about Dogecoin, and no evidence that Musk owned two wallets where suspicious trading took place, or that he or Tesla ever sold Dogecoin.
On “Saturday Night Live,” Musk called Dogecoin a “scam” while playing a fictional financial expert in a segment on “Weekend Update.”
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