Toronto-Dominion Bank is facing significant fines totaling about $3.09 billion US from U.S. regulators after pleading guilty to charges related to violating the Bank Secrecy Act and committing money laundering. The penalties imposed on the bank are said to be the largest under the Bank Secrecy Act, according to U.S. Attorney General Merrick Garland.
The fines and penalties come after it was found that TD had "significant, systemic breakdowns in its transaction monitoring program," leading to an environment that allowed financial crime to flourish. The bank has also received a cease-and-desist order and non-financial sanctions, including an asset cap limiting its growth in the United States.
Garland highlighted that TD Bank admitted in its plea agreement to allowing three money-laundering networks to transfer over $670 million US through its accounts over a six-year period. At least five TD Bank employees were involved in one of these schemes.
In response to the scandal, TD Bank has undergone a leadership shakeup, with outgoing chief executive Bharat Masrani taking responsibility for the shortcomings. Raymond Chun has been named as his replacement upon Masrani's retirement next year.
The bank's guilty plea to conspiracy to commit money laundering and its failures under the Bank Secrecy Act mark a historic moment, as TD Bank has become the largest bank in U.S. history to face such charges. Garland emphasized that the penalties imposed on TD Bank are the largest ever under the Bank Secrecy Act.
Overall, the situation surrounding TD Bank's fines and penalties serves as a stark reminder of the importance of robust anti-money-laundering programs and the consequences that financial institutions may face for failing to adhere to regulations.