A US federal judge has thrown out a court case accusing AOL and some of its executives of insider trading following a mass repurchasing of shares in 2011.
The claimants in the case say they lost a large amount of money when the company bought back 14.8 million shares without revealing that $1 billion (£640 million) worth of patents would be sold to Microsoft months later.
The Microsoft deal sent AOL's stock price surging 43 per cent in just one day, a profit that those who had sold their shares in the repurchase missed out on.
The plaintiffs had argued that knowledge of the impending deal allowed AOL, along with its CEO Tim Armstrong and former CFO Arthur Minson, to buy the company stock at a big discount.
However, Judge Denise Cote concluded that "the complaint's conspiracy theory is mere speculation," in her 18 page opinion. Cote added that the fillings had failed to identify a clear example where AOL execs had misled investors prior to the patent sale being announced in April 2012.
"The remaining allegations in the complaint simply provide no basis for an assertion that AOL and Microsoft reached a secret deal for the sale of the patents months before the auction was conducted," Cote wrote.
Furthermore, the judge said that AOL disclosures and press reports preceding the sale revealed that the company was working to sell patents and so "render implausible any suggestion that the public was not aware that AOL possessed an extremely valuable patent portfolio".