TD Bank fined $9.2 million for failing to report suspicious transactions

TORONTO – Canada’s financial crimes watchdog has fined Toronto-Dominion Bank $9.2 million for failing to comply with money laundering and terrorist financing measures, as the bank also faces compliance investigations in USA

The sanction imposed by Canada’s Financial Reporting and Transactions Analysis Centre, or Fintrac, comes after it imposed a $7.5 million fine on RBC and a $1.3 million fine on CIBC, both announced in December. Those sanctions also addressed non-compliance issues related to money laundering and terrorist financing.

The penalty against TD is for five violations during a review between March 1, 2022 and March 31, 2023, the agency said.

The failures include failure to file suspicious transaction reports when there were reasonable grounds to require it, including negative media related to customers, failure to assess and document risks of money laundering or financing of terrorist activities, and the bank’s failure to take prescribed special measures to high risk cases. risk.

During its review, Fintrac identified 96 customers who were not included in the bank’s high-risk customer program, including one politically exposed foreign person who was able to transact for more than two years without the bank obtaining required customer details.

TD is working to improve, spokeswoman Lisa Hodgins said in a statement.

“As part of its periodic review of Canadian financial institutions, FINTRAC identified five specific administrative findings that require our attention. Improvements have been made and more are underway.”

The sanction against TD comes just days after the bank revealed it had taken an initial provision of $450 million in connection with the ongoing US regulatory investigation into its anti-money laundering compliance program.

The bank said Tuesday that its talks with three U.S. regulators and the Justice Department are ongoing and it anticipates additional financial sanctions.

TD said its program was “insufficient to effectively monitor, detect, report and respond to suspicious activity” and work is underway to remedy the deficiencies.

National Bank analyst Gabriel Dechaine said total fines could exceed market expectations by somewhere between $500 million and $1 billion, while the bank also faces risks of regulators issuing consent orders that could mean more restrictions.

At the bank’s Annual General Meeting last month, TD Chief Executive Bharat Masrani asked shareholders to be patient as the bank works to remove regulatory overhang on the stock.

“Without a doubt, shareholders have some anxiety, as do we, regarding our problem in the United States, and until there is greater clarity, I’m sure there will be pressure.”

This report by The Canadian Press was first published May 2, 2024.

Companies in this story: (TSX:TD)