American Express Co. disclosed Monday that it could face up to $500 million in losses from various lawsuits and federal inquiries beyond what it has already set aside in reserve for such losses.
The disclosure in Amex's annual report with the Securities and Exchange Commission is a new requirement by the agency, which demands that companies tell investors what their losses from litigation could be in a worst-case scenario. Companies set a litigation reserve based on what they consider reasonable possible losses.
"This estimated range of possible loss does not represent the [Amex's] maximum loss exposure," the company said in its annual report.
Amex's shares recently traded at $43.61, up 8 cents.
The New York-based company's legal entanglements include a civil antitrust suit brought against it in October by the Justice Department after American Express refused to join an industrywide agreement to allow merchants to steer customers toward cheaper forms of plastic.
Unlike other credit card companies, Amex both issues cards and processes transactions. It issues both charge cards requiring a monthly payoff and credit cards on which customers can carry a balance.
Last week, Citigroup Inc. disclosed that it could face up to $4 billion in legal losses this year on top of what it has accrued; Bank of America Corp. said its worst-case scenario exceeds what it has already set aside as legal reserves by $1.5 billion; and Wells Fargo & Co.'s estimate is $1.2 billion.
