TD could face penalties in probe of anti-money laundering compliance in U.S.
Toronto-Dominion Bank, coming off less-than-stellar third-quarter financial results that fell short of analyst expectations, said it is facing a probe over anti-money-laundering (AML) compliance in the United States.
In notes to its earnings report, TD said it has been responding to both formal and informal inquiries from regulators and law enforcement concerning its Bank Secrecy Act and AML compliance program and that the probes include an investigation by the U.S. Department of Justice.
The disclosure under legal and regulatory matters said Canada’s second-largest bank is co-operating with U.S. authorities and “anticipates monetary and/or non-monetary penalties to be imposed” even though the outcome of the investigations is unknown at this time.
In May, TD called off its planned US$13.4-billion acquisition of Memphis-based First Horizon Corp., saying the decision was mutual because there was no clarity on when regulatory approval would be reached. Subsequent media reports suggested regulators were concerned about the Canadian bank’s AML compliance in the U.S.
TD did not mention the cancelled acquisition in its Aug. 24 earnings report. The bank said the regulatory and law enforcement inquiries concern its Bank Secrecy Act/AML compliance program “both generally and in connection with specific clients, counterparties or incidents in the U.S.”
In addition to cooperating with the authorities, TD said it is “pursuing efforts to enhance its … compliance program.”
TD has had a significant presence in the U.S. for a couple of decades. In the mid-2000s,it acquired New England-based Banknorth Group Inc. and Hudson United Bancorp, which took it into New York and New Jersey. The bank’s scale in the U.S. was doubled in 2008 when it
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