Wells Fargo & Co. has increased its estimate for potential losses stemming from litigation against the bank.  The nation's 2nd largest bank in terms of deposits, disclosed in its quarterly earnings filing with the SEC that it could face up to $1.7 billion in losses from various lawsuits above and beyond what it has already set aside in reserve for such losses.  All banks are required to set aside a reserve in case they lose or settle law suits, and while that reserve is rarely disclosed, they have to disclose what they could possibly lose beyond their reserves. 

The San Francisco-based bank likely can attribute the growth of its legal liability to acquisitions of the past couple of years - including A.G. Edwards, H.D. Vest and, most notably, Wachovia Corporation.   That said, Compliance-Insights does not mean to infer that all three of these companies contributed mightily to Wells Fargo's greater legal risks.  For one thing, the difficult economic conditions in the U.S. - particularly in the mortgage markets - has hit all commercial banks, including relatively conservative Wells Fargo.  However, it's understood that Wachovia came with some extra baggage - which made some industry experts question the acquisition.  [Dow Jones Newswires, 5/6/11]