TD Banking Group Expects US Penalties for Money Laundering

TD Banking Group disclosed that they expect fines and non-compliance penalties related to US authorities’ investigation of their Anti-Money Laundering (AML) compliance framework.

TD Bank representatives stated they are cooperating with US authorities and regulatory departments in their inquiries related to their AML rules. On August 24, the bank disclosed a report to its shareholders and said they might face penalties due to an ongoing investigation. They also claim they are working on designing an effective and efficient AML compliance system to enhance its bank security. In the report to shareholders, TD Bank stated, “the bank has been responding to formal and informal inquiries from regulatory authorities and law enforcement concerning its Bank Secrecy Act/anti-money laundering compliance program, both generally and in connection with specific clients, counterparties or incidents in the U.S., including in connection with an investigation by the United States Department of Justice.”

Early this year, TD Bank failed to get approval from the regulator for its acquisition of First Horizon Bank. Bloomberg claimed at the time that approval was late due to concerns of regulatory departments about the monitoring system of suspicious customer transactions. Due to this, they have called off their $13.4 billion merger with First Horizon Bank, it was after TD Bank told First Horizon that they did not have regulatory approvals. 

According to US authorities’ investigation, National Bank analyst, Gabriel Dechaine, said in a note, “we believe the potential fallout from this issue could result in higher capital costs and higher investment spending to address the issue.” TD Bank stock closed 3% down after this news. In the report to its shareholders, TD Bank further stated that, “while the ultimate outcomes of these inquiries and investigations are unknown at this time, the bank anticipates monetary and/or non-monetary penalties to be imposed.”

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