Elon Musk, the CEO of Tesla and SpaceX, has been accused of insider trading by investors in a lawsuit filed in Manhattan federal court. The lawsuit alleges that Musk made false and misleading statements about Dogecoin, a cryptocurrency, in order to artificially inflate its price and profit from the sale of his own Dogecoin holdings.
The lawsuit was filed by a group of investors who lost money when the price of Dogecoin fell sharply after Musk's statements. The investors allege that Musk knew that Dogecoin was a "worthless" cryptocurrency, but he made false and misleading statements about it in order to drive up its price.
The lawsuit also alleges that Musk sold his own Dogecoin holdings at a profit after the price of the cryptocurrency had been artificially inflated by his statements. The investors are seeking damages from Musk and Tesla.
A spokesperson for Musk has denied the allegations in the lawsuit, calling them "frivolous." The spokesperson said that Musk's statements about Dogecoin were protected by the First Amendment and that he did not profit from the sale of his Dogecoin holdings.
The lawsuit is the latest in a series of legal challenges facing Musk. In February, Musk and Tesla agreed to pay $20 million to settle a lawsuit with the Securities and Exchange Commission (SEC) over Musk's tweets about taking Tesla private. The SEC alleged that Musk's tweets were misleading and that he had failed to properly disclose his plans to take Tesla private.
Musk has also been criticized for his use of Twitter to promote Dogecoin. In May, Musk tweeted that he was "eating a Tesla short for breakfast, lunch and dinner" in an apparent reference to investors who had bet against the company. The tweet was widely interpreted as a threat against short sellers, and it led to a sharp increase in the price of Dogecoin.
The lawsuit against Musk is the latest sign that regulators and investors are becoming increasingly concerned about his use of Twitter. It remains to be seen whether the lawsuit will be successful, but it is clear that Musk's actions are under increasing scrutiny.