Tesla CEO Elon Musk is facing a legal battle over allegations of insider trading concerning the cryptocurrency Dogecoin (DOGE). His legal representatives have now requested that the lawsuit be dismissed, citing its lack of merit and labeling it as a burden on the judicial system.
In a recent development, lawyers representing Elon Musk have submitted a letter to a federal court in New York, urging the presiding judge to dismiss the lawsuit against Musk. The lawsuit, originally brought forward by disgruntled investors in June 2022, alleges that Musk engaged in insider trading by promoting DOGE to his online followers, causing them financial losses. The plaintiffs initially sought $258 billion in damages from Musk, claiming his actions were responsible for their investment downturn.
Musk's lawyer, Alex Shapiro, vehemently criticized the lawsuit, describing it as "baseless" and "frivolous." He argued that the entire case rests on the premise that Musk's tweets about DOGE were actionable insider trading, which he firmly disputes. Shapiro emphasized that Musk's tweets were often light-hearted and should not be misconstrued as material, non-public information that could affect the cryptocurrency market.
The core argument put forth by Musk's legal team is that the lawsuit is grounded in the misinterpretation of his social media activity. The team contends that Musk's tweets, which included statements like "Dogecoin to the moooonn" and "Dogecoin will live forever," were examples of puffery—exaggerated expressions lacking a precise meaning or intent. The defense asserts that such statements are not substantial enough to qualify as materially false or misleading information.
The lawsuit has undergone multiple revisions since its inception, with the lead attorney for the plaintiffs, Evan Spencer, introducing new charges over time. In the most recent amendment in June 2023, Spencer included allegations of market manipulation and insider trading, attempting to establish a stronger case against Musk. However, Musk's legal team argues that these additions still need to present a viable cause of action and lack the specificity required by legal standards.
One crucial point of contention is the identification of specific wallets from which Musk allegedly conducted DOGE trades while influencing the cryptocurrency's price through his tweets. Musk's attorneys contest the plaintiffs' assertions that these wallets belong to him, highlighting the absence of conclusive evidence supporting this claim.
Both parties acknowledge that Dogecoin is a speculative investment. Still, Musk's defense emphasizes that this characteristic is widely recognized and acknowledged by the public, making it an inappropriate basis for an insider trading allegation.
Furthermore, the defense argues that Musk's private intentions behind his tweets should not be deemed non-public information about Dogecoin. They assert that the plaintiffs have failed to substantiate their claim that Musk's "cheerleading" for Dogecoin on social media had a material impact on the cryptocurrency's market value.
In conclusion, Elon Musk's legal team is resolute in its demand for the dismissal of the lawsuit, asserting that the plaintiffs have repeatedly fallen short of presenting a valid cause of action. They contend that the lawsuit's allegations are unfounded, relying on a misinterpretation of Musk's tweets and an insufficient demonstration of harm caused by his social media activity. As the legal proceedings continue, the court will ultimately determine whether the lawsuit holds merit and whether Musk's alleged actions constitute insider trading in cryptocurrency.