Toronto Dominion Bank (TD Bank) reportedly faces fines of up to $4 billion in connection with a money laundering investigation in the United States.
The analyst estimates that Jefferies Financial Group That’s double the previous estimate, highlighting the severity of the potential impact on Canada’s second-largest bank. report Wednesday (June 5th).
The allegations include instances in which TD Bank branch employees allegedly facilitated money laundering and circumvented anti-money laundering (AML) measures, according to the report.
America Department of Justicebank regulators, and Ministry of Finance Authorities are currently investigating several TD Bank U.S. branches for possible money laundering and other financial crimes, according to reports.
According to the report, the investigation uncovered a case in which a former TD Bank branch employee in Florida allegedly accepted bribes to help clients transfer millions of dollars to Colombia, and a former New York employee who admitted to circumventing the bank’s compliance measures and defrauding customers.
In a statement provided to PYMNTS on Tuesday (June 4), a bank spokesperson said: “TD, like other financial institutions, works with law enforcement to help identify, stop and prosecute criminals. When we became aware of these issues, we took action against these employees and have worked collaboratively with the Department of Justice to support their efforts to bring these criminals to justice. More broadly, where our programs have not been effective, we are taking action to hold those leaders accountable, drive change and meet our obligations.”
The revelations come after TD Bank initially set aside $450 million to prepare for possible fines from regulators, according to a Bloomberg report on Wednesday.
However, analysts believe that this amount may not be sufficient, given the additional cases that have since been reported, the report said.The potential fine TD Bank could face has been estimated by various analysts, with previous estimates ranging from $600 million to $2 billion. One analyst suggested that the fine could exceed $3 billion and that TD Bank could face a five-year asset cap on its U.S. operations.
In addition to the potential fines, TD Bank is also fighting a shareholder class action lawsuit filed in Canada, Bloomberg reported.
According to the report, the lawsuit alleges that the bank misrepresented systemic deficiencies in its AML controls and how these deficiencies affected its U.S. operations.
TD Bank spokesperson Lisa Hodgins He told Bloomberg: “TD’s disclosures and public statements are accurate and consistent with our obligations under the securities laws and our responsibilities to shareholders. We dispute the meritless allegations in these class action lawsuits.”
