Elon Musk accused of insider trading by Dogecoin investors in a revised class-action lawsuit.
A group of investors in Dogecoin has requested permission to update their class-action lawsuit against Elon Musk, the soon-to-be-former CEO of Twitter. They allege that Musk manipulated the price of the meme token. In a filing made on May 31 in the United States District Court for the Southern District of New York, the investors claimed that Musk used his social media following on Twitter and his appearances in the media to profit from trades of Dogecoin. They also alleged that Musk caused the price of the token to spike through actions such as changing Twitter’s logo to the Dogecoin logo. The investors originally filed their complaint in June 2022 before Musk’s takeover of Twitter but have since amended it at least two times based on his actions. They are now requesting leave from the court to amend the complaint to allege that Musk was involved in insider trading of Dogecoin and to argue that the token is a security under the standards of the US Securities and Exchange Commission. According to the investors, Musk has engaged in a “deliberate course of carnival barking market manipulation and insider trading…” and has “preyed on the earnest hopes of vulnerable Americans, including war veterans, blue collar workers, and the elderly.” Musk changed the Twitter logo to that of Dogecoin on April 3, a few days after his legal team requested the second amended lawsuit be dismissed. At the time, the Twitter CEO’s filing said “funny pictures” and “tweeting words of support” did not amount to fraud. Since Musk’s takeover of Twitter in October 2022, the value of the social media platform has reportedly dropped to roughly 33% of the $44 billion he paid. On May 12, he announced he would be stepping down as CEO sometime in June, to be replaced by NBCUniversal’s former chair of global advertising and partnerships, Linda Yaccarino.