'Shark Tank' Star Kevin O'Leary Off the Hook in Fraud Lawsuit

Kevin O’Leary is off the hook in a fraud lawsuit -- and his lawyers are saying he should never have been sued in the first place.

A judge just granted O'Leary's motion to toss the suit filed against him last year ... alleging he helped promote a massive scam that duped a bunch of people trying to start businesses.

20 entrepreneurs sued Kevin and others for allegedly encouraging them to use crowdfunding companies to kickstart their business ideas. The problem is they claim it was a total bunk, and they all ended up losing money.

Here’s the thing though ... Kev’s attorneys, Paul Sorrell and Andrew Brettler, tell us the reason the judge agreed to dismiss O'Leary from the case is because -- put simply -- the court didn't buy that O’Leary's general statements about crowdfunding were enough to hold him accountable when people pursued those paths.

In other words -- just because the crowdfunding plan didn't pan out, it's not Kevin's fault

In any case, all’s well that ends well for Mr. Wonderful ... who previously told us the suit was bogus, and that he’d defend himself in court.