Company was accused of keeping shareholders in the dark about business prospects.
Zynga has ended litigation which accused the ‘FarmVille’ creators of defrauding shareholders about its business prospects pre and post IPO in 2011.
The company said that it reached the settlement in lieu of $23m, which was reached through mediation.
Zynga said that the incident would not affect the company financially as its insurers would fund the entire payout.
The lawsuit was led by shareholder David Fee who accused the gaming company of hiding declining user activity, and the impact of changes in Facebook’s platform on its games.
The company was also accused ot inflating its 2012 revenue forecast.
Trouble started brewing post IPO, when it started to struggle to create games that were as successful as "FarmVille", and customers dumped the company and got hooked on to "Candy Crush Saga" by rival King Digital Entertainment, reported Bloomberg.
Zynga priced its IPO at $10 per share in 2011, which even went up to $15.91 in March 2012, but later it fell down to $3 less than five months later, which wiped out several billions of dollars of market value.