Elon Musk, the CEO of Tesla Inc., has won the dismissal of a high-profile $258 billion lawsuit accusing him and his company of manipulating the price of Dogecoin (DOGE), the popular meme-based cryptocurrency.
On Thursday, U.S. District Judge Alvin Hellerstein ruled in favor of Musk and Tesla, dismissing the claims made by a group of disgruntled investors.
Judge Rules Tweets Were “Puffery” and Not Actionable
The lawsuit, filed in June 2022 by a group of Dogecoin holders, alleged that Musk and his company used social media and public statements to artificially inflate the token’s price, only to let it crash afterward, causing significant financial losses for them.
The plaintiffs claimed that Musk’s tweets and public endorsements of the meme coin drove its price up by more than 36,000% over two years before it eventually plummeted.
Judge Hellerstein dismissed the accusations, ruling that the SpaceX CEO’s statements were “aspirational” and constituted “puffery” rather than actionable claims. The judge also determined that the statements were not “factual and susceptible to being falsified” and that “no reasonable investor could rely upon them” as a basis for making investment decisions.
The complainants had pointed to several of the 53-year-old’s tweets as evidence of material misrepresentations, including his declaration that he would become the “official CEO of Dogecoin” and his claim that he might put a “literal Dogecoin” on a SpaceX rocket and fly it to the moon.
Pump and Dump Allegations
The investors also accused the tech billionaire and his electric car company of participating in a “pump and dump” scheme with the meme coin. However, the judge found that they failed to provide a clear and plausible explanation of how the two had engaged in such a situation.
“It is not possible to understand the allegations that form the basis of plaintiffs’ conclusion of market manipulation,” Hellerstein wrote in his decision.
According to a March 31 Reuters report, Musk’s legal team had previously sought to have the case dismissed, arguing that his accusers had not demonstrated how he intended to defraud anyone or what risks he had concealed.
They maintained that his tweets, including statements like “Dogecoin Rulz” and “no highs, no lows, only Doge,” were too vague to support claims of fraud.
“There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion,” his lawyers argued.
They added that the court should stop the plaintiffs’ fantasy and dismiss the complaint.
