Lloyd Blankfein’s gold-plated bank appears to be dialing up estimates on everything except for profits. Yesterday, Goldman Sachs announced that costs of its mortgage-related securities minted during the credit crisis could saddle it with a whopping $15.8 billion tab. According to the NY Post report that’s more than a 3,150 percent increase from the $485 million estimate Goldman offered up just about three months ago.
The gigantic mortgage liability increase is a result of a fresh lawsuit against the firm run by CEO Blankfein by the Federal Housing Finance Agency, which alleges that Goldman should have known that some $11.1 billion in dicey mortgage securities it sold the agency were ticking time bombs.
In the public filing, Goldman also estimated that its legal expenses rose to $2.6 billion from $2 billion last quarter. The firm’s beefed up legal bills come as its boss Blankfein is still facing a probe by the Department of Justice related to the investment bank’s role in the 2008 credit crisis and allegations that the lied under oath to a Congressional finance panel.
Blankfein hired star criminal lawyer Reid Weingarten to represent him personally in the matter. Goldman has said the hiring is routine in such investigations...
Read more at http://www.nypost.com/p/news/business/goldman_oops_may_be_CNuxsMQpGyEQFg8jgdJWFI
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