E&Y pays $3.5m in pasta lawsuit

Ernst & Young's US arm has agreed to pay $3.5m (£1.8m) to affected shareholders for its part in a class-action lawsuit involving US pasta giant American Italian Pasta.

E&Y's offer, pending approval by plaintiffs, would provide 15 cents a share before expenses, the Kansas City Star reported.

In mid-2005 shareholders filed a series of lawsuits, alleging violations of securities laws, against the pasta maker, its directors and various officers and Ernst & Young. The suits were consolidated into one class-action lawsuit in early 2006.

Earlier this year American Italian, one of the largest pasta makers in North America, agreed to pay $25m to shareholders who are a part of the class-action lawsuit