Elon Musk and Tesla have been cleared in a class action lawsuit that accused them of manipulating the Dogecoin (DOGE) market, causing investor losses. U.S. District Judge Alvin Hellerstein dismissed the case with prejudice on Thursday, marking a significant win for Musk and Tesla, as the lawsuit is now permanently closed and cannot be refiled.
The lawsuit, filed in June 2022 by a group of investors, accused Musk of defrauding them through his actions and statements about Dogecoin, including various tweets. The investors claimed that Musk’s public comments, such as joking about becoming Dogecoin’s CEO and suggesting he would place a Dogecoin on SpaceX and send it to the moon, were misleading and contributed to market manipulation.
The investors filed the suit in the Southern District of New York, targeting Musk and his companies, Tesla and SpaceX. However, Judge Hellerstein ruled that these statements were not factual and amounted to “aspirational and puffery,” which are not grounds for a fraud claim. He further stated that no reasonable investor could have relied on such statements as a basis for financial decisions.
The judge also dismissed the plaintiffs’ claims of market manipulation, stating that it was “not possible to understand” the allegations forming the basis of their conclusions. The claims included accusations of a “pump and dump” scheme and breaches of fiduciary duty that would amount to insider trading, but these were found to lack sufficient grounding.
Following the dismissal, Dogecoin, currently the ninth-largest cryptocurrency by market capitalization, saw a slight decline of 1.2% over the past 24 hours, trading at around $0.10. Its market capitalization stands at approximately $14.6 billion.