In a May 31 filing in the United States District Court for the Southern District of New York, the investors claimed Musk used his social media following on Twitter as well as media appearances to profit off trades of DOGE through an “undisguised course of cryptocurrency market manipulation.” According to the complaint, Musk profited off DOGE trading at the expense of other investors by causing the price of the token to spike through actions including changing Twitter’s logo to the Dogecoin logo.
The investors filed their initial complaint in June 2022 — prior to Musk’s takeover of Twitter but following his initial interest in promoting DOGE on the social media platform — but have amended the lawsuit at least two times based on his actions. They requested leave from the court to amend their complaint alleging Musk was responsible for insider trading of DOGE but also to claim the token was a security under the standards of the U.S. Securities and Exchange Commission.
“This is a securities fraud class action arising from a deliberate course of carnival barking market manipulation and insider trading by the world’s richest man Elon Musk, who hijacked an emergent pop-culture phenomenon to cross-promote himself and his companies, and to pad his obscene fortune, preying on the earnest hopes of vulnerable Americans, including war veterans, blue collar workers, and the elderly,” said the amended lawsuit.
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.
Musk had not tweeted about the amended complaint at the time of publication. As one of the world’s richest people, the Twitter CEO has made frequent statements about Dogecoin and other cryptocurrencies, often causing the price of the token to surge. He started using Twitter to comment on DOGE to his millions of followers in 2019.
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.