As a seasoned analyst with over two decades of experience in financial markets, I find it refreshing to see a court decision that leans towards common sense and the spirit of free speech. The dismissal of the $258 billion lawsuit against Elon Musk and Tesla Inc. for their alleged manipulation of Dogecoin is a clear victory for the First Amendment and the right to express one’s opinion, even if it happens to be about a meme-based cryptocurrency.
A major lawsuit against Elon Musk, head of Tesla Inc., alleging manipulation of the price of Dogecoin (a well-known digital currency based on a joke), has been dropped.
Last Thursday, Judge Alvin Hellerstein decided in favor of Elon Musk and Tesla, discarding the accusations brought forth by a group of unhappy investors.
Judge Rules Tweets Were “Puffery” and Not Actionable
In June 2022, a collective of Dogecoin owners filed a lawsuit, claiming that Elon Musk and his business manipulated the market through social media posts and public declarations. They assert that this manipulation led to an unnatural increase in the token’s value, which later plummeted, resulting in substantial financial losses for them.
The plaintiffs argued that Elon Musk’s tweets and public promotions significantly increased the value of the meme coin by over 36,000% in just two years. However, this inflated price later dramatically fell.
As an analyst, I observed Judge Hellerstein’s ruling dismissing accusations against SpaceX’s CEO. He classified the CEO’s statements as “aspirational” or “puffery,” which means they were more about expressing ambition than making actionable claims. The judge also clarified that these statements weren’t factual enough to be proven false and no reasonable investor would base investment decisions on them due to their lack of reliability.
The critics highlighted various tweets from the 53-year-old as proof of misleading statements, such as his assertion that he would be appointed CEO of Dogecoin and his suggestion of actually launching a “real Dogecoin” on a SpaceX rocket to the moon.
Pump and Dump Allegations
Additionally, the investors alleged that the tech tycoon and his electric vehicle firm were involved in a “buy-and-sell scam” involving the meme token. Nevertheless, the court determined that their evidence did not convincingly demonstrate the means by which they collaborated on such an activity.
In a statement made in his ruling, Hellerstein expressed that he found it difficult to comprehend the claims that led the plaintiffs to conclude there was market manipulation.
Based on a March 31st Reuters article, Musk’s lawyers had previously attempted to dismiss the case, claiming that his accusers failed to prove how he planned to deceive anyone or what dangers he had hidden.
They argued that the tweets, such as “Dogecoin Rulz” and “no highs, no lows, only Doge,” were not specific enough to substantiate allegations of fraudulent activity.
“His legal team stated that it’s perfectly fine to post messages encouraging or sharing amusing images about a genuine cryptocurrency with a market value close to $10 billion, as there is no legal restriction for such actions.”
They added that the court should stop the plaintiffs’ fantasy and dismiss the complaint.
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2024-08-30 10:48