Goldman raises possible legal cost estimate to $5.9B

File this one under…”Keep up the good work!”

  • Goldman Sachs (GS -0.2%) raises its estimate for possible legal costs in excess of reserves to $5.9B, including costs that could arise from a Department of Justice probe into sales of mortgage-backed securities, up from $3.8B estimated three months ago.
  • According to its latest 10-Q, GS says “potential resolution of this matter… may result in significant penalties and other costs.”
  • In July, GS reported its smallest quarterly profit in nearly four years as it set aside more than $1.45B to cover potential mortgage settlements.
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