Lawsuit claiming Elon Musk rigged dogecoin ends

By Jonathan Stempel

NEW YORK (Reuters) – A lawsuit accusing Elon Musk of rigging dogecoin is ending.

Investors in the cryptocurrency who said the world’s richest person and his electric car company Tesla (NASDAQ:) committed fraud and insider trading are withdrawing their appeal from an Aug. 29 dismissal of their case.

They are also withdrawing a bid to sanction Musk’s lawyers for allegedly interfering with the appeal, including by demanding payment of their hefty legal fees.

Musk and Tesla, meanwhile, withdrew their motion to sanction the investors’ lawyer for allegedly pursuing a “frivolous” case with ever-changing legal theories to “extort a quick handout.”

A stipulation dismissing the appeal and both sides’ motions was filed on Thursday night in federal court in Manhattan. It requires approval by U.S. District Judge Alvin Hellerstein.

Lawyers for the investors and Musk did not immediately respond on Friday to requests for comment.

Investors accused Musk of using Twitter posts, an appearance on NBC’s “Saturday Night Live” and other stunts to trade dogecoin at their expense, including by timing trades to Musk’s public statements and activities.

In the Aug. 29 dismissal, Hellerstein said reasonable investors could not prove securities fraud from relying on Musk’s tweets, including that dogecoin was the future currency of Earth and could be flown to the moon by his company SpaceX.

The judge also said he did not understand the investors’ related market manipulation and insider trading claims.

Investors originally sought $258 billion, and amended their complaint four times in two years.

Musk bought Twitter in 2022 and rebranded it X.

On Tuesday, President-elect Donald Trump picked Musk and biotechnology company founder Vivek Ramaswany to lead a new Department of Government Efficiency, whose acronym echoes dogecoin’s name.

The case is Gorog et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.