TD Bank Fires More Than A Dozen After Anti-Money-Laundering Failings, Says Report

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by Tyler Durden
Thursday, May 23, 2024 - 05:20 PM

The anti-money-laundering scandal at Toronto-Dominion Bank, currently under investigation by the US Justice Department, has sparked an internal reorganization at the Canadian bank, leading to the termination of over a dozen employees. 

According to a report from the Wall Street Journal, citing a source familiar with the situation, the employees were fired for failing to maintain the bank's anti-money-laundering standards.

The person said action was taken against certain leadership in the anti-money laundering function and people working in US bank branches who were found to have breached TD's internal code of conduct, which employees agree to each year. Some employees were fired as criminal charges were brought against them. Other disciplinary steps were imposed on staff where the bank determined there were minor infringements, the person added. -WSJ 

At an investor conference earlier today, following TD's financial results for the second quarter, President and Chief Executive Bharat Masrani said an internal investigation into the failings has progressed. He said the bank had fired employees responsible for the failings. Neither the source nor the bank released further details about the exact number of firings and or names of the fired workers. 

"We have significantly strengthened the leadership of our US anti-money-laundering function," bank spokeswoman Elizabeth Goldenshtein said, adding the bank has brought in top talent with experience transforming and leading anti-money-laundering programs to ensure this lapse never happens again. 

Earlier this month, WSJ revealed a Justice Department investigation into TD Bank's internal controls focused on how Chinese drug gangs used the bank to launder money from US fentanyl sales. The bank set aside $450 million to resolve one of those inquiries and expects more penalties. 

Following the earnings report, Bloomberg Intelligence's Paul Gulberg and Ethan Kaye pointed out that the $450 million reserve for an anti-money laundering probe could exceed that amount as it only addresses negotiations with one regulator. 

TD Bank's Canada-listed shares moved lower by 1.3% in the session, down 7% since WSJ's report on the DoJ probe earlier this month

"Criminals are regularly targeting financial institutions and, in these cases, TD did not effectively thwart their activity. This is unacceptable. TD has been cooperating closely with the authorities to help them prosecute these criminals," Masrani said.