TD Bank pleads guilty in US, faces business restrictions
- TD Bank's two units pleaded guilty to U.S. criminal charges related to money laundering, agreeing to pay $3 billion in penalties.
- The bank failed to monitor over $18 trillion in customer transactions for nearly a decade, allowing illicit funds to be transferred.
- The plea deal includes an asset cap and restrictions that will hinder TD Bank's expansion in the U.S., leading to the CEO's planned retirement.
In October 2024, two units of TD Bank pleaded guilty to criminal charges in the United States, resulting in a historic $3 billion penalty for money laundering violations. The bank's failures included not monitoring over $18 trillion in customer transactions for nearly a decade, which allowed illicit funds to be transferred through its accounts. This situation was exacerbated by a culture that prioritized profits over compliance, leading to significant scrutiny from U.S. authorities. The plea deal includes an asset cap and other business restrictions, severely impacting TD Bank's expansion plans in the U.S., which is crucial for its income. CEO Bharat Masrani, who has been in charge for nearly ten years, announced his retirement next year, taking responsibility for the bank's compliance failures. The scandal has already led to significant underperformance of TD's stock and a restructuring of its compliance programs, including the termination of numerous employees and the appointment of a new CEO to distance the bank from its troubled past.