FILE PHOTO: A photo of Elon Musk is displayed on a smartphone placed on representations of cryptocurrency Dogecoin in this illustration taken June 16, 2022. REUTERS/Dado Ruvic/Illustration
NEW YORK — Elon Musk is being accused of insider trading in a proposed class action by investors, complaining that the Tesla Inc CEO manipulated the cryptocurrency Dogecoin, costing them billions of dollars.
In a Wednesday night (May 30) 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.
READ: The ‘Dogefather’ Elon Musk changes Twitter logo to Dogecoin
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.
READ: Elon Musk frees the bird and the dog coin flies
Investors have accused Musk, the world’s second-richest person according to Forbes magazine, of deliberately driving up Dogecoin’s price more than 36,000% over two years and then letting it crash.
They included their latest accusations in a proposed third amended complaint, in a lawsuit that began last June.
READ: Elon Musk $258-B Dogecoin lawsuit expands
Musk and Tesla had in March sought a dismissal of the second amended complaint, calling it a “fanciful work of fiction,” and on May 26 said another amendment was unjustified.
In a Wednesday order, U.S. District Judge Alvin Hellerstein said he would “likely” allow the third amended complaint, saying the defendants would not likely be prejudiced.
READ: Elon Musk sued for $258 billion over dogecoin support
Hellerstein also granted the investors’ request to dismiss the nonprofit Dogecoin Foundation as a defendant. Its lawyer Seth Levine called the dismissal “the appropriate result.”
The case is Johnson et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.
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