Gold­man scales back es­ti­mate of le­gal costs

The Pak Banker - - COMPANIES/BOSS -

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.

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