Elon Musk and his electric car company Tesla have had a federal lawsuit dismissed alleging they misled investors with insider trading and caused billions of dollars in losses by hyping the cryptocurrency Dogecoin.
The ruling was handed down Thursday night by U.S. District Judge Alvin Hellerstein in Manhattan.
Investors have accused the world's richest man of using Twitter posts, a 2021 appearance on NBC's “Saturday Night Live” and other promotional activities to make profits at investors' expense through multiple Dogecoin wallets controlled by him or Tesla.
The allegations also say that Musk deliberately pumped up the price of Dogecoin by more than 36,000% over a two-year period before allowing it to crash, and that Musk and Tesla often timed their transactions to coincide with Musk's public statements and activities regarding Dogecoin.
This includes Musk's April 2023 sale of Dogecoin after he replaced Twitter's bluebird logo with Dogecoin's Shiba Inu dog logo, which caused the cryptocurrency's price to rise 30%, according to investors.
But Hellerstein said Musk's tweets about Dogecoin being the currency of the future of Earth and that it can be used to buy Tesla cars or literally fly to the moon with his company SpaceX are “aspirational, hyped, untrue and open to falsification.”
The judge said that meant no reasonable investor could rely on the tweet to bring a securities fraud lawsuit, and called the investors' claims of market manipulation and insider trading “incomprehensible.”
Hellerstein has had the lawsuit dismissed, which means it cannot be filed again.
The investors originally sought $258 billion and amended their complaint four times over two years.
Lawyers for the investors did not immediately respond to a request for comment.
“This is a very good day for Dogecoin,” Musk's lawyer, Alex Spiro, said in an emailed statement.
In seeking dismissal of the lawsuit, Musk's lawyers argued there was nothing wrong with his “harmless and often silly Tweets.”
The report also said there was no evidence that Musk had two wallets to conduct suspicious transactions or that Musk or Tesla sold any Dogecoin.
While playing a fictional financial expert on Saturday Night Live's “Weekend Update” segment, Musk called Dogecoin a “scam.”
Musk bought Twitter in October 2022 and renamed it X. According to Forbes magazine, he is worth $239.3 billion.
The case is Gorog et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.
