By Justin Baer
Goldman Sachs Group Inc. raised the top end on its range of
"reasonably possible" legal losses to about $3 billion, the Wall
Street firm said Monday in a regulatory filing.
The estimate, which tracks potential losses above what was
already set aside in reserves, stood at about $2.5 billion in
November.
Goldman set aside $754 million for legal and regulatory
proceedings last year, compared with the $962 million in net
provisions the firm took in 2013. The firm recorded $161 million in
provisions during the fourth quarter.
The forecast for "reasonably possible" losses doesn't include
"any future claims from the continuing investigations" of a U.S.
task force designed to probe banks' actions in creating mortgage
bonds that soured during the financial crisis, Goldman said in the
filing.
The firm said it received a letter in December from the U.S.
attorney's office in the Eastern District of California noting
prosecutors had "primarily concluded" that Goldman had violated
federal law in connection with underwriting, securitizing and
selling mortgage bonds. The prosecutors said they may file a civil
action related to the case, and asked Goldman to respond to the
allegations.
Goldman said it had redeemed about $2.97 billion in hedge-fund
investments since March 2012, as the firm moved to comply with the
so-called Volcker rule that limits how big banks put their own
money at risk. Goldman sold $762 million in those investments in
2014.
Goldman also said Monday that its traders posted net losses on
28 days last year. In the same period, the firm had more than $100
million in net trading revenue on 28 days.
Write to Justin Baer at justin.baer@wsj.com
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