Subsequent Event

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Event

Note 28.

Subsequent Event

On October 22, 2020, the firm announced that it has reached settlements of governmental and regulatory investigations relating to 1MDB with the DOJ, the SEC, the FRB, the NYDFS, the FCA, the PRA, the Singapore Attorney General’s Chambers, the Singapore Commercial Affairs Department, the Monetary Authority of Singapore and the Hong Kong Securities and Futures Commission.

The firm will pay total penalties, after crediting, of approximately $2.6 billion in connection with the settlements. A separate obligation to pay $606 million in disgorgement has been credited and satisfied as a result of the firm’s earlier settlement with the Government of Malaysia, in which the firm paid a total of $2.5 billion, in addition to providing a $1.4 billion asset recovery guarantee.

As a result of these settlements, subsequent to the firm’s issuance of its earnings release filed as an exhibit to the Form 8-K dated October 14, 2020 (Form 8-K), the firm recorded an additional provision for litigation and regulatory proceedings of $250 million for the third quarter of 2020, increasing the net provisions to $256 million for the third quarter of 2020.

The table below presents further information about this change.

	Three Months Ended September 2020
in millions, except per share amounts		Form 10-Q	Form 8-K	Change
Pre-tax earnings		$4,299	$4,549	$ (250	)
Provision for taxes		932	932	–
Net earnings		3,367	3,617	(250	)
Preferred stock dividends		134	134	–
Net earnings applicable to common shareholders		$3,233	$3,483	$ (250	)
Earnings per common share
Basic		$  9.07	$  9.77	$(0.70	)
Diluted		$  8.98	$  9.68	$(0.70	)

See Note 27 for further information about these settlements.