TD Bank pleads guilty in major money laundering case, October 2024
- The U.S. Department of Justice revealed on October 10, 2024, that TD Bank N.A. and TD Bank Holding Company pleaded guilty to significant violations involving money laundering and the Bank Secrecy Act.
- The bank will pay over $1.8 billion in penalties after it was found to have failed to monitor a substantial majority of transactions for potential criminal activity.
- These admissions raised concerns among investors, leading to a sharp decline in Toronto-Dominion's stock price and the classification of TD Bank as the largest bank in U.S. history to plead guilty to money laundering conspiracy.
On October 10, 2024, it was disclosed that two subsidiaries of the Toronto-Dominion Bank, TD Bank N.A. and TD Bank Holding Company, had pleaded guilty to serious offenses surrounding the Bank Secrecy Act and conspiracy to commit money laundering. This revelation came after years of investigation by the U.S. Department of Justice, which uncovered that the banks had failed to adequately monitor around 92% of their transactions, totaling approximately $18.3 trillion from January 2018 to April 2024. The gravity of the situation was underscored by Deputy Attorney General Lisa Monaco’s comments which stated that TD Bank’s compliance program had been severely under-resourced, effectively inviting criminal activity. Attorney General Merrick Garland's remarks highlighted how the bank's practices had allowed it to operate in a way that directly contradicted regulatory compliance, gravely affecting its public image. CEO Bharat Masrani’s earlier admission regarding the shortcomings of the bank's Anti-Money Laundering program spurred a notable decline in Toronto-Dominion's share prices, exacerbated by the DOJ's announcement. This resulted in extensive fallout in the financial markets, leading to further scrutiny of the bank's internal audits and governance structures. With over $1.8 billion in penalties agreed upon, the plea agreements represent a historic moment in U.S. banking law. Investors are now left to grapple with the implications of the poor compliance measures and the potential long-term consequences for the bank's operations and reputation.