The court however upheld Svartholm Warg's conviction for hacking into IT firm Logica, meaning he will still spend a year behind bars.
Svartholm Warg was convicted in June to two years in prison for unlawful data breaches, aggravated fraud, and attempted aggravated fraud, in what was called Sweden's biggest-ever hacking trial.
On Wednesday, however, the Svea Court of Appeal cleared the 28-year old of all charges relating to the hacking of Nordea's computer systems, saying that it was impossible to prove that he had illegally gained access to their mainframe.
Svartholm Warg had maintained his innocence about the bank hacking charges saying that somebody else had used his computer remotely.
“The important thing is to get the higher court to review the evidence in-depth, something that the lower court definitively didn’t do,” Kristina Svartholm, the Pirate Bay co-founder's mother told website TorrentFreak prior to Wednesday's ruling.
Svartholm Warg was convicted by the Nacka District Court in June after a hacking attack against Swedish IT firm Logica through which he gained unauthorized access to the personal data of thousands of people, which he then published online.
Logica supplies public agencies in Sweden with personal data from the country's population registry.
Svartholm Warg was arrested in Cambodia and deported to Sweden in September last year due to an arrest warrant issued for him in relation to his conviction in the Pirate Bay trial.
Since December, Svartholm Warg has been held in a prison in Mariefred in central Sweden where he is serving out a prison sentence related to his activities with The Pirate Bay.
Svartholm Warg and his fellow Pirate Bay co-founders Fredrik Neij and Peter Sunde, as well as financier Carl Lundström, were all convicted in 2009 of facilitating copyright infringement and ordered to pay 46 million kronor ($6.9 million) in damages to the music and movie industry.
While Neij, Sunde, and Lundström all had their 12-month sentences reduced to between four and 10 months on appeal in late 2010, Warg did not attend his appeal hearing and his one-year sentence was upheld.