The Securities and Exchange Commission has dropped an investigation into Goldman Sachs Group Inc’s role in selling $1.3 billion worth of subprime mortgage securities, the investment bank said in a regulatory filing on Thursday.
In February Goldman received a so-called Wells notice from SEC staff related to disclosures in the deal’s offering documents. Such notices typically indicate the agency plans to take some kind of enforcement action, and give firms a chance to respond.
On Monday, the SEC notified Goldman that the investigation had been closed and that it did not intend to recommend any enforcement action against the bank related to the offering, Goldman said in its quarterly 10-Q filing with the SEC.
The investment bank also lifted its estimate of “reasonably possible” legal losses to $3.4 billion from a previous estimate of $2.7 billion three months earlier. The estimate does not include potential losses from legal matters that are at an early stage or that are too difficult to predict.
Goldman said it lost money on six trading days in the second quarter, or 9 percent of the time, down from 15 trading days in the year-ago period. The bank got at least $100 million worth of trading revenue on four of the 64 trading days in the quarter, or 6 percent of the time.
Earlier this week, Goldman’s chief Wall Street rival Morgan Stanley, said it lost money on 15 trading days last quarter and made at least $100 million on three trading days.