Musk’s remarks regarding Dogecoin, according to US District Judge Alvin Hellerstein, were “aspirational and puffery, not factual and susceptible to being falsified.”
A federal lawsuit accusing Elon Musk and his electric vehicle company, Tesla, of manipulating Dogecoin and causing investors to suffer significant financial losses was successfully dismissed.
US District Judge Alvin Hellerstein in Manhattan made the ruling on Aug. 29, a court filing shows.
In June 2022, investors sued Tesla and Elon Musk. Musk was accused at the time of using his platform to manipulate the price of Dogecoin through appearances on “Saturday Night Live,” Twitter posts, and other publicity stunts.
He allegedly sold Dogecoin at times when it was anticipated that his actions—such as altering Twitter’s logo to feature the Dogecoin Shiba Inu dog—would raise its value. He allegedly used this tactic to benefit from insider trading.
Additionally, the lawsuit asserted that Musk purposefully manipulated the market by deceiving investors with his public endorsements and remarks regarding Dogecoin. Furthermore, rather than being grounded in reality, the lawsuit called these actions “puffery.”
Elon Musk Calls Dogecoin Lawsuit ‘Fanciful Work of Fiction’
Because of this, the plaintiffs sought $258 billion in damages, claiming that Musk’s influence caused Dogecoin’s value to decline.
But on March 31, 2023, Musk moved to dismiss the lawsuit. In his defense, Musk’s legal team described the claims and the $258b damage request as a “fanciful work of fiction.” As a result, they argued for the case to be thrown out.
Judge Rules Musk’s Dogecoin Tweets Were ‘Puffery,’ Dismisses Fraud Allegations
The defendants misconstrued a number of Musk’s tweets regarding Dogecoin, the judge noted. For instance, they made false claims about his appointment as Dogecoin’s official CEO and about his intention to use a SpaceX vehicle to launch a real Dogecoin to the moon.
Hellerstein added that Musk’s tweets were “aspirational and puffery, not factual and susceptible to being falsified.”
The judge also decided that Musk’s tweets could not be used as the basis for a reasonable investor to file a securities fraud claim. He believed that it was “not possible to understand” how these tweets validated the investors’ allegations of insider trading and market manipulation. As a result, the court rejected the accusations.
Dogecoin was last down 0.3% on the day, trading around $0.10.