TD sues wealth adviser who left during money-laundering review

financialpost.com:

It seemed like a typical dispute between a company and a former employee: Toronto-Dominion Bank sued wealth adviser Gregg Desmarais last month, claiming he and a colleague “abruptly” resigned and violated their contracts by luring away clients with millions of dollars of assets to competitor Raymond James Financial Inc.

But Toronto-Dominion told an entirely different story when it reported his departure to regulators in April: Desmarais voluntarily quit after the bank opened an internal review over suspected violations of anti-money-laundering policies, according to a disclosure the Canadian banking giant filed with the Financial Industry Regulatory Authority.

The notice came as Toronto-Dominion is under investigation by the U.S. Department of Justice, bank regulators and the Treasury Department over allegations that it failed to catch money laundering and other financial crimes at several of its U.S. branches. The lender has said it’s in the midst of a “comprehensive overhaul” of its anti-money-laundering program.

Toronto-Dominion declined to comment on the lawsuit against Desmarais, citing the ongoing legal proceedings. The internal review cited on his Finra profile “is not related to the bank’s broader AML investigation,” spokesperson Lisa Hodgins said.

She said the investigation disclosed to Finra was not concluded before Desmarais left the bank and that it is unrelated to the non-solicitation lawsuit, which doesn’t mention anti-money-laundering issues.

“Mr. Desmarais denies TD’s baseless allegations,” Michael Roche, a lawyer representing Desmarais in the lawsuit, said by email. “I would also like to note that TD’s lawsuit against my client has nothing to do with TD’s AML issues.”

Representatives for Raymond James