Exxon Mobil has defeated the New York attorney general in a landmark fraud trial as a judge ruled the company did not mislead investors by downplaying the potential costs to its business from future climate regulations.

Exxon’s victory in the second climate change lawsuit to reach trial in the U.S. cleared it of making materially false and material disclosures in violation of the Martin Act, a New York law that authorizes the state’s attorney general to bring securities fraud actions.

After a three-week trial, state Supreme Court Justice Barry Ostrager found the AG had failed to prove that any alleged misrepresentation by Exxon “was false and material in the context of the total mix of information available to the public.”

He said the state “produced no testimony” from “any investor who claimed to have been misled by any disclosure” and that the testimony of its expert witnesses was “eviscerated” by Exxon.

Attorney General Letitia James stood by the case, saying, “Despite this decision, we will continue to fight to ensure companies are held responsible for actions that undermine and jeopardize the financial health and safety of Americans across our country, and we will continue to fight to end climate change.”

But Exxon said the ruling “affirms the position ExxonMobil has held throughout the New York Attorney General’s baseless investigation. We provided our investors with accurate information on the risks of climate change.”

In accounting for the future potential cost of climate change, Exxon publicly disclosed its proxy cost of carbon, which estimates the financial impact of regulations decades into the future.

A second, less conservative estimate of “greenhouse gas cost” that Exxon used for specific projects was not disclosed until 2014. As a result, the state said, its assets appeared more secure than they really were, which in turn affected its share price and defrauded investors.

The company “effect[ively] erected a Potemkin village to create the illusion that it had fully considered the risks of climate change regulation and had factored those risks into its business operations,” the state said in its complaint.

Photo source: ANGELA WEISS/AFP via Getty Images

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