NEW YORK, June 1 (Reuters) – Elon Musk is being accused of insider trading in a proposed class action by investors accusing the Tesla Inc (TSLA.O) CEO of manipulating the cryptocurrency Dogecoin, costing them billions of dollars.
In a Wednesday night filing in Manhattan federal court, investors said Musk used Twitter posts, paid online influencers, his 2021 appearance on NBC’s “Saturday Night Live” and other “publicity stunts” to trade profitably at their expense through several Dogecoin wallets that he or Tesla controls.
Investors said this included when Musk sold about $124 million of Dogecoin in April after he replaced Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo, leading to a 30% jump in Dogecoin’s price.
A “deliberate course of carnival barking, market manipulation, and insider trading” enabled Musk to defraud investors, and promote himself and his companies, the filing said.
Musk bought Twitter last October. He also runs SpaceX, a rocket and spacecraft manufacturer, as well as Tesla, which makes electric cars.
Alex Spiro, a lawyer for Musk and Tesla, declined to comment on Thursday. The investors’ lawyer did not immediately respond to requests for comment.
According to the investors involved in the case, Elon Musk, who is recognized as the world’s second-richest person by Forbes magazine, has been accused of intentionally manipulating the price of Dogecoin.
The allegations suggest that Musk deliberately drove up the price of Dogecoin by an astonishing 36,000% over a span of two years and subsequently allowed it to crash.
However, the specific details, evidence, and legal arguments pertaining to these allegations are not provided in the given information. This accusation forms part of the broader context of the lawsuit against Musk and others involved.
In the ongoing lawsuit that commenced in June of the previous year, Elon Musk and Tesla introduced their latest allegations in a proposed third amended complaint.
The exact content and specifics of these new accusations are not provided in the given information. However, it indicates that Musk and Tesla have sought to update their legal claims by proposing amendments to the original complaint.
This suggests an ongoing development in the case as both parties continue to refine and expand upon their respective arguments and claims.
In March, Elon Musk and Tesla requested the dismissal of the second amended complaint, referring to it as a “fanciful work of fiction.” They argued that the allegations presented in the complaint lacked merit or factual basis.
Then, on May 26, Musk and Tesla further contended that allowing another amendment to the complaint would be unjustified.
The specific details and content of the second amended complaint, as well as the reasons provided by Musk and Tesla for seeking dismissal and opposing further amendments, are not mentioned in the given information. However, it highlights the stance taken by Musk and Tesla in their legal response to the case.
In a recent order issued on Wednesday, U.S. District Judge Alvin Hellerstein indicated that he would “likely” allow the third amended complaint to proceed. The judge expressed the belief that the defendants would not be significantly disadvantaged or prejudiced by this decision.
The specific details and content of the amended complaint, as well as the nature of the potential prejudice, are not provided in the given information. However, this order suggests that the judge is inclined to allow the plaintiffs to modify their complaint and move forward with the case.
In addition to the case Johnson et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037, Judge Hellerstein granted a request by the investors to dismiss the nonprofit Dogecoin Foundation as a defendant.
The foundation’s lawyer, Seth Levine, expressed satisfaction with the dismissal, referring to it as “the appropriate result.” The specific reasons for the dismissal and the role of the Dogecoin Foundation in the case are not provided, but this development indicates that the foundation is no longer a party to the litigation.
The case, Johnson et al v. Musk et al, is a legal dispute being heard in the U.S. District Court, Southern District of New York, with case number 22-05037.
The case involves multiple plaintiffs, represented by the Johnson party, who are suing Elon Musk and others, represented by the Musk party.
The specific details and nature of the case are not mentioned within the given information, but it indicates that the dispute has reached the stage of litigation in the federal court system.
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Information Source:- Reuters