Wachovia Corp.'s net loss in the second quarter widened to $9.11 billion after the Charlotte company increased its legal reserves by $500 million, according to a regulatory filing.

The quarterly report, filed late Monday with the Securities and Exchange Commission, also said that the $812 billion-asset Wachovia is in "active discussions" with state regulators and the SEC about settling claims over its dealings in auction-rate securities.

Wachovia also said that the SEC is considering "civil and/or administrative proceedings" regarding unit Wachovia Bank's municipal derivatives bid practices, and that it faces several class actions in U.S. District Court for the Southern District of New York regarding its October 2006 purchase of the Oakland, Calif., thrift company Golden West Financial Corp.

The company had reported a net loss of $8.86 billion on July 22. Wachovia said it did not expect a settlement to have a "material effect on capital, liquidity, or overall financial results" and that it would reduce its Tier 1 capital ratio by about 3 basis points, or 7.97% based on June 30 data.

Wachovia also said in the filing that it plans to eliminate 6,950 direct employees, 9.4% more than it gave in an estimate last month. Monday's filing also said that the company expects to record $525 million to $650 million in restructuring costs. About $475 million to $600 million of that will cover severance, with "substantially" all of those costs coming this quarter, the filing said.

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