Goldman Raises Estimate on Legal Costs in Excess of Reserves 27%

Goldman Sachs Group Inc. increased its estimate for reasonably possible legal costs in excess of reserves by 27 percent to $3.8 billion.

The first-quarter figure, which the New York-based firm disclosed in a regulatory filing Tuesday, was up from $3 billion in the same period a year earlier. The estimate was the firm’s highest since the third quarter of 2013, according to data from Bloomberg Intelligence.

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.

The estimate doesn’t include costs that could arise from a Department of Justice probe into sales of mortgage-backed securities or a lawsuit brought by the Libyan Investment Authority, the bank said in the filing.

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