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Business News/ News / World/  Elon Musk accused of insider trading by investors in Dogecoin lawsuit

Elon Musk accused of insider trading by investors in Dogecoin lawsuit

  • Investors have accused Musk of deliberately driving up Dogecoin's price more than 36,000% over two years and then letting it crash

Tesla Chief Executive Officer Elon Musk walks next to Tesla's Senior Vice President Tom Zhu and Vice President Grace Tao as he leaves a hotel in Beijing

Tesla Inc CEO Elon Musk is being accused of insider trading by the investors who have brought about a class action lawsuit against the automobile company accusing it of manipulating the cryptocurrency Dogecoin, costing them billions of dollars.

The investors have told Manhattan federal court that Elon Musk used micro-blogging site Twitter's posts, paid online influencers, deliberately undertook ‘publicity stunts’ like his 2021 appearance on NBC's "Saturday Night Live" among others 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. Elon Musk bought Twitter last October.

A "deliberate course of carnival barking, market manipulation and insider trading" enabled Musk to defraud investors, promote himself and his companies, the filing said.

Alex Spiro, a lawyer for Musk, declined to comment on Thursday. A lawyer for Tesla did not immediately respond to a request for comment. The investors' lawyer did not immediately respond to a separate request.

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.

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, US District Judge Alvin Hellerstein said he would "likely" allow the third amended complaint, saying the defendants would not likely be prejudiced.

Meanwhile, the Pentagon announced that it is buying Starlink satellite communications terminals and services from billionaire Elon Musk’s SpaceX for use by the Ukraine military, the Defense Department said.

(With inputs from agencies)

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