Goldman’s Reasonably Possible Legal Losses Drop to $2.5 Billion

Goldman Sachs Group Inc. said its “reasonably possible” legal losses dropped to $2.5 billion in the third quarter from $3.2 billion at the end of June.

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.

Provisions for litigation and regulatory matters at New York-based Goldman Sachs were $194 million in the third quarter, bringing this year’s total to $593 million, or 3.4 percent of the firm’s $17.7 billion in operating expenses, the company said last month.

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