Goldman scales back estimate of legal costs
Goldman Sachs Group Inc has scaled back its estimate of the legal costs it may face, beyond what it has set aside, by more than half to $2 billion.
The bank had estimated in November legal expenses of up to $5.3 billion in excess of what it had set aside.
The Wall Street bank, which ranked No. 1 in advising on both announced and completed mergers and acquisitions globally in 2015, is involved in a number of judicial, regulatory and arbitration proceedings.
"The uncertain regulatory enforcement environment makes it difficult to estimate probable losses, which can lead to substantial disparities between legal reserves and subsequent actual settlements or penalties," the bank said in a regulatory filing. For the fourth quarter, the bank reported a 64 percent jump in non-compensation costs due mainly to $1.95 billion that was set aside for litigation and regulatory issues.
Goldman is among several financial firms targeted by a federal-state working group investigating misconduct in the sale of mortgage-backed securities prior to the financial crisis.