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 The bank had estimated in November legal expenses of up to $5.3
billion above what it had already 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 the $1.95 billion set aside for
litigation and regulatory issues.
Goldman is among several financial firms targeted by a federal-state
working group probing misconduct in the sale of mortgage-backed
securities prior to the financial crisis.
The U.S. Department of Justice and state officials have already
extracted multi-billion dollar settlements from a number of large
U.S. banks including JP Morgan Chase & Co, Bank of America Corp and
Citigroup Inc over the sale of mortgage-backed securities.
Goldman in early January agreed to pay over $5 billion to settle
claims it misled mortgage bond investors during the financial
crisis.
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The settlement underscored how Wall Street is yet to shake off the
legacy of the U.S. subprime crisis, when mortgages were sold to
people who could not afford them and then repackaged for investors
without an adequate explanation of how risky they were.
Shares of the bank were up 0.8 percent at $148.10 in trading before
the bell. Up to Friday's close, the stock had lost 18.5 percent in
value since the beginning of the year.
(Reporting by Sweta Singh in Bengaluru; Editing by Anil D'Silva)
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