Both parties said yesterday they resolved to dismiss and release all claims.
The terms of the settlement were confidential.
"We're pleased to bring this matter to a conclusion," Morningstar chairman and chief executive Joe Mansueto said.
"The settlement allows us to eliminate ongoing expense and business distraction."
In 1999, Morningstar invested in FPG Research, a company founded and run by Rich, which later became known as Morningstar Australia. Rich was appointed managing director of Morningstar's Australian business.
The lawsuit dates back to 2001 over unresolved disputes relating Morningstar's acquisition of company shares formerly owned by Rich and his subsequent dismissal.
Rich filed a lawsuit in the New South Wales Supreme Court on eight causes of action, including alleged breaches of contract and sought AUS$25 million in damages.
In 2005 Morningstar held reserves of around AUS$2.5 million to fund the litigation.
Rich now operates Sydney-based financial publishing house brillient!
"I'm pleased to finally bring this matter to a reasonable conclusion," Rich said.
InvestorInfo (publisher of InvestorDaily) is a subsidiary of Morningstar Australia.
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