A South Korean court acquitted a blogger on Monday of spreading false information, in a case that triggered debate about freedom of speech in cyberspace and critics said was only launched because his economic doom postings angered authorities.

Defendant Park Dae-sung, who went by the pseudonym Minerva after the Greek goddess of wisdom became a household name last year for his predictions of sharp falls in the won and the local stock market and the collapse of U.S. investment bank Lehman Brothers.

He's been found not guilty, a court official said by telephone. The court threw out charges that he purposely harmed market sentiment by posting false information on his blog.

Prosecutors said a posting Park made in December led to volatility in the local currency and caused financial authorities to inject billions of dollars to stabilize the Korean won.

Even if there was recognition that it was false information, he cannot be seen as having acted on purpose to harm public interest considering the situation at the time including the special nature of the foreign exchange market, the court said.

As the markets tumbled last year, the main financial regulator warned it would crack down on what it considered malicious rumors. Some economic analysts said they had come under pressure from authorities not to voice negative views on the economy.

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South Korean markets appeared to have passed their worst turmoil in a decade at the time of Park's arrest in January but suffered another setback in March on lingering concerns about the country's ability to secure dollars to repay debt.

Since the arrest, legal experts have questioned whether authorities had legal grounds to prosecute individuals on views aired in online media. The conservative party of President Lee Myung-bak has been pushing for a tough law on cyber slander.

The Lee government has also been backing media reforms that would lift restrictions on big business from owning broadcast networks, which have led to protests at TV networks whose union members feel the move would lead to cuts in press freedom.

Park's lawyer said the case arose from a misguided attempt by the government to control public opinion in cyber space.

The law itself is unconstitutional, and it is a dead law where the computer cannot be the subject of regulation, lawyer Park Chang-jong, who is not related to the defendant, told reporters after the verdict.

Blogger Park has been identified by prosecutors as an unemployed 30-year-old man who kept to his modest apartment in Seoul and learned of the financial markets with books he ordered online.

Since his detention, reports have flooded local media saying he was a quiet man with a humble education background, which experts said may be an attempt to discredit him in a society that places high value on elite education and prestigious jobs.

(Additional reporting by Reuters TV; Editing by Jon Herskovitz)

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