Elon Musk, CEO of Tesla Inc., has triumphed in dismissing a $258 billion lawsuit that accused him and his company of manipulating the price of Dogecoin (DOGE), the well-known meme cryptocurrency.
Court Rules Musk’s Statements as “Puffery”
On Thursday, U.S. District Judge Alvin Hellerstein ruled in favor of Musk and Tesla, rejecting the lawsuit brought by Dogecoin investors. The plaintiffs had alleged that Musk utilized social media and public endorsements to artificially boost Dogecoin’s value, leading to significant losses when the price eventually fell.
The investors argued that Musk’s public support and tweets led to a dramatic 36,000% surge in Dogecoin’s price over two years before it crashed. However, Judge Hellerstein dismissed these claims, stating that Musk’s comments were “aspirational” and amounted to “puffery,” rather than actionable fraud. The judge noted that these statements were not factual and could not reasonably be used as a basis for investment decisions.
Allegations of Market Manipulation
The investors also accused Musk and Tesla of participating in a “pump and dump” scheme involving Dogecoin. However, Judge Hellerstein found that the plaintiffs failed to provide a clear and plausible account of such actions. The judge commented that the allegations did not sufficiently explain how market manipulation had occurred.
Musk’s legal team had previously sought to dismiss the case, arguing that the plaintiffs had not demonstrated any intent to defraud or hidden risks. They maintained that Musk’s tweets, such as “Dogecoin Rulz” and “no highs, no lows, only Doge,” were too ambiguous to support fraud claims. The team argued that endorsing a cryptocurrency in a humorous or supportive manner is not unlawful and requested the court to reject the lawsuit as unfounded.
This dismissal marks a significant legal victory for Musk and Tesla, reinforcing that promotional statements, even if exaggerated, do not necessarily constitute fraud.
