The settlement resolves a September 2011 suit in which the FHFA, the conservator of Freddie Mac and Fannie Mae, alleged that Morgan Stanley made "untrue statements and material omissions" in the sale of about $US11 billion ($A12.34 billion) in worth of mortgage security securities, Morgan Stanley said in a 2013 securities filing. Tuesday's securities filing described the deal as "an agreement in principle" and said it is still subject to "final approval" by the parties.