Goldman Raises Estimate of Possible Legal Losses to $5.9 Billion
2015-08-03 10:21:44.305 GMT
By Michael J. Moore
(Bloomberg) -- Goldman Sachs Group Inc. increased its
estimate for reasonably possible legal costs in excess of
reserves by 55 percent to $5.9 billion.
The second-quarter figure, which the New York-based firm
disclosed in a regulatory filing Monday, was up from $3.8
billion three months earlier. Unlike in previous quarters, the
estimate included costs that could arise from a Department of
Justice probe into sales of mortgage-backed securities.
Goldman Sachs has held talks with the Justice Department
over a settlement of that probe and may pay as much as $3
billion, a person familiar with the talks said in June. The bank
added $1.45 billion to reserves for litigation and regulatory
proceedings in the second quarter, more than in the previous
five quarters combined.
The estimate released Monday gives investors an idea of
potential losses beyond those reserves. U.S. firms began
disclosing estimates for possible legal losses after the U.S.
Securities and Exchange Commission told finance chiefs in 2010
they should provide investor guidance “when there is at least a
reasonable possibility” costs will be incurred, even if the
risk is too low to require reserves.
For Related News and Information:
Top financial stories: FTOP <GO>
Goldman Sachs earnings: GS US <Equity> EM <GO>
On bank earnings: TNI BNK ERN <GO>
Goldman Sachs events: GS US <Equity> EVT <GO>
To contact the reporter on this story:
Michael J. Moore in New York at +1-212-617-6919 or
mmoore55@bloomberg.net
To contact the editors responsible for this story:
Peter Eichenbaum at +1-212-617-5722 or
peichenbaum@bloomberg.net
Steve Dickson
2015-08-03 10:21:44.305 GMT
By Michael J. Moore
(Bloomberg) -- Goldman Sachs Group Inc. increased its
estimate for reasonably possible legal costs in excess of
reserves by 55 percent to $5.9 billion.
The second-quarter figure, which the New York-based firm
disclosed in a regulatory filing Monday, was up from $3.8
billion three months earlier. Unlike in previous quarters, the
estimate included costs that could arise from a Department of
Justice probe into sales of mortgage-backed securities.
Goldman Sachs has held talks with the Justice Department
over a settlement of that probe and may pay as much as $3
billion, a person familiar with the talks said in June. The bank
added $1.45 billion to reserves for litigation and regulatory
proceedings in the second quarter, more than in the previous
five quarters combined.
The estimate released Monday gives investors an idea of
potential losses beyond those reserves. U.S. firms began
disclosing estimates for possible legal losses after the U.S.
Securities and Exchange Commission told finance chiefs in 2010
they should provide investor guidance “when there is at least a
reasonable possibility” costs will be incurred, even if the
risk is too low to require reserves.
For Related News and Information:
Top financial stories: FTOP <GO>
Goldman Sachs earnings: GS US <Equity> EM <GO>
On bank earnings: TNI BNK ERN <GO>
Goldman Sachs events: GS US <Equity> EVT <GO>
To contact the reporter on this story:
Michael J. Moore in New York at +1-212-617-6919 or
mmoore55@bloomberg.net
To contact the editors responsible for this story:
Peter Eichenbaum at +1-212-617-5722 or
peichenbaum@bloomberg.net
Steve Dickson