Elon Musk Accused of Insider Trading?!

Investors have lodged a class action lawsuit against Elon Musk, the CEO of Tesla, accusing him of insider trading and orchestrating the manipulation of the cryptocurrency Dogecoin, resulting in substantial financial losses. The lawsuit was recently filed in the United States District Court for the Southern District of New York, with investors alleging that Musk utilized his vast Twitter following and media appearances to engage in overt manipulation of the cryptocurrency market. According to the complaint, Musk profited from Dogecoin trades while causing harm to other investors by artificially inflating the token's price through various actions, including changing the logo of Twitter to that of Dogecoin.

The initial complaint was originally filed in June 2022, following Musk's initial interest in promoting Dogecoin on Twitter, and has since been amended at least twice to reflect his subsequent actions. The investors sought permission from the court to amend their complaint, accusing Musk not only of insider trading with regards to Dogecoin but also asserting that the token should be classified as a security under the regulations of the U.S. Securities and Exchange Commission (SEC).

The amended lawsuit characterizes the situation as a securities fraud class action, attributing it to an intentional and calculated campaign of market manipulation and insider trading orchestrated by Elon Musk, the wealthiest person in the world. The lawsuit alleges that Musk capitalized on an emerging pop-culture phenomenon to promote himself, his companies, and further increase his already substantial fortune, taking advantage of the hopes of vulnerable Americans, including war veterans, blue-collar workers, and the elderly.

On April 3, shortly after Musk's legal team requested the dismissal of the second amended lawsuit, he changed the Twitter logo to the Dogecoin logo. In response, Musk's filing argued that sharing “funny pictures” and expressing support through tweets did not constitute fraudulent activity.

The group of investors further claimed that Musk engaged in profitable trading at their expense, utilizing several Dogecoin wallets controlled by either Tesla or himself. Additionally, they alleged that Musk paid online influencers and leveraged his massive Twitter following to manipulate the price of Dogecoin as early as 2019. The investors also asserted that Musk's appearance on NBC's 'Saturday Night Live' in 2021, along with other publicity tactics, was intended to exert influence over the digital asset's value.

Since Musk's acquisition of Twitter in October 2022, the platform's value has reportedly plummeted to approximately 33% of the $44 billion he paid. Furthermore, on May 12, Musk announced his forthcoming resignation as CEO, to be replaced by Linda Yaccarino, NBCUniversal's former chair of global advertising and partnerships.