Citigroup Inc has reached a settlement of lawsuit by a federal agency accusing the bank of misleading Fannie Mae and Freddie Mac into buying $3.5 billion of mortgage-backed securities, a court filing said Tuesday.

The settlement with the Federal Housing Finance Agency was disclosed in a filing in U.S. District Court in Manhattan, where a series of related cases by the agency against Wall Street banks are pending. The filing did not disclose the terms of the deal.

The accord marks the second so far out of 18 securities fraud cases the FHFA filed against banks in 2011 over more than $200 billion in mortgage-backed securities sold to Fannie and Freddie.

(Reporting by Nate Raymond in New York; Editing by Leslie Adler)