Goldman Sachs said in regulatory paperwork filed on Monday that it could lose about $3.43 billion as a result of judicial, regulatory and arbitration proceedings launched against the firm over the last decade.
According to the Feb. 28 filing, many of the proceedings are at preliminary stages and many of the cases seek an “indeterminate amount of damages.”
“Management has estimated the upper end of the ranges of reasonable possible loss being equal to (i) the amount of money damages claimed, where applicable, (ii) the amount of securities that the firm sold in cases involving underwritings where the firm is being sued by purchasers and is not being indemnified,” Goldman said in its filing with regulators.
The banking firm said the total also considers the possibility that it has to buy back securities which may have seen a drop in value.
Equity analysts at Standard & Poor's meanwhile said they maintain a "hold" opinion on Goldman shares.
"Although we view this estimate of legal costs as a negative, we do not expect these potential charges to adversely affect GS's long term performance," according to S&P analysts. "We think that the environment for investment banking and brokerage operations is positive, and we see client activity levels as improving."
The firm is the subject of litigation related to its role as an underwriter of structured bonds such as CDOs.
The regulatory filings also showed that Goldman is involved with litigation related to its underwriting of initial public offerings and it is a defendant in two adversary proceedings in the U.S. bankruptcy court of the Southern District of New York related to Adelphia Communications' bankruptcy.
On Tuesday, shares of Goldman were off $1.39 at $162.39 a share in above-average trading volume. The banking firm’s stock has traded as high as $186.40 and as low as $129.50 over the last 52 weeks.