Investors accuse Tesla of ‘carnival barking, market manipulation, insider trading’
Investors accuse Musk of insider trading in a class action lawsuit against Tesla, saying the company’s manipulation of Dogecoin cost them billions of dollars. They argue in a Manhattan federal court that Musk used paid online influencers, deliberately undertook ‘publicity stunts’ like his 2021 appearance on NBC’s “Saturday Night Live,” and more, to trade profitably at their expense through several Dogecoin wallets that he or Tesla controls. They say this included the time Musk sold about $124 million of Dogecoin after he replaced Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo, leading to a 30% jump in Dogecoin’s price. The accusations are part of a proposed third amended complaint in the lawsuit which began in June 2022. (Tesla sought a dismissal of the second amended complaint, calling it a “fanciful work of fiction,” and said another amendment was unjustified, but US District Judge Alvin Hellerstein said he would “likely” allow the third amended complaint, as the defendants would not likely be prejudiced.) A “deliberate course of carnival barking, market manipulation and insider trading” enabled Musk to defraud investors, promote himself and his companies, the filing said.
Tesla lawyers: Musk’s statements could be deepfakes
Tesla’s lawyers argue in court filings that some of Musk’s statements about the safety of their autopilot features cannot be trusted, because they could be deepfakes. This includes Musk, saying in a speech in 2016:
A Model S and Model X, at this point, can drive autonomously with greater safety than a person right now.
The lawyers say they don’t know whether Musk really made the statements or not:
At first glance it might seem unusual that Tesla could not admit or deny the authenticity of video and audio recordings purportedly contain statements by Mr. Musk…The reality is he, like many public figures, is the subject of many ‘deepfake’ videos and audio recordings that purport to show him saying and doing things he never actually said or did.
Judge Pennypacker says these arguments are “deeply troubling” and tentatively orders Musk to be interviewed under oath for three hours about whether he made the statements:
Their position is that because Mr. Musk is famous and might be more of a target for deepfakes, his public statements are immune. In other words, Mr. Musk, and others in his position, can simply say whatever they like in the public domain, then hide behind the potential for their recorded statements being a deep fake to avoid taking ownership of what they did actually say and do.
The filings are part of a lawsuit brought against Tesla in 2019, alleging that the autopilot feature was defective, resulting in the death of the car’s owner.