A federal judge on Monday dismissed a lawsuit accusing AOL and some of its executives of fraud for repurchasing 14.8 million shares in 2011 without disclosing that the company would sell a $1 billion portfolio of patents to Microsoft a few months later. AOL's stock surged 43 percent in a single day after the announcement.

However shareholders said they suffered significant losses when they sold their shares ahead of the patent deal. Had they known the deal with Microsoft was imminent they would not have allowed AOL, its CEO Tim Armstrong and former CFO Arthur Minson to effectively buy their company's stock at a discount price.

US District Judge Denise Cote said in an 18-page opinion said that the complaint's conspiracy theory is mere speculation. The lawsuit failed to provide an adequate example in which AOL executives made a material misstatement or omission prior to the announcement of the patent sale on April 9, 2012, Cote said.

It was well known in the market that AOL's patent portfolio might be extremely valuable, Cote wrote. The company disclosed in numerous public filings that its patents were among its most valuable assets. Press reports from the time and AOL disclosures that it was working to sell the patents "render implausible any suggestion that the public was not aware that AOL possessed an extremely valuable patent portfolio," Cote wrote.