TD Bank could face money-laundering fines of US$4B: Jefferies
Fines against Toronto-Dominion Bank tied to U.S. money-laundering probes may total as much as US$4 billion following fresh allegations involving the lender, according to Jefferies Financial Group Inc. analysts — double previous estimates of the potential impact on Canada’s second-largest lender.
A now-departed Toronto-Dominion branch employee in Florida took a series of US$200 bribes to help clients move millions of dollars to Colombia by skirting anti-money-laundering defences, prosecutors allege in a case first reported this week by Bloomberg News. In another recent case, a former branch employee in New York admitted to bypassing the bank’s compliance measures to defraud a customer.
Toronto-Dominion is under investigation by the U.S. Department of Justice, bank regulators and the Treasury Department over allegations of money laundering and other financial crimes at several of the bank’s U.S. branches.
“While our previous estimate for the regulatory fines was at US$2 billion, given that a third AML issue has been reported, we now believe that this estimate could be low,” Jefferies analysts led by John Aiken wrote in a report Wednesday. “Although a US$4 billion fine does seem a bit high at this juncture, we cannot deny that it is still within the realm of possibilities, potentially eroding all of TD’s current excess capital.”
The U.S. Attorney’s Office for the District of New Jersey has so far filed at least four cases alleging serious misconduct by branch employees in New York, New Jersey and Florida. One of those cases, reported by the Wall Street Journal in early May, involved TD branches being used to launder drug money as part of a US$653 million conspiracy.
The revelations came after Toronto-Dominion said on April
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