Canadian bank TD Bank has agreed to plead guilty to violating United States money laundering laws and to pay approximately $3 billion in penalties to American authorities, the latter announced on Wednesday.
The credit institution, whose American subsidiary is the tenth largest bank in the United States by size of assets, was notably accused of having allowed criminals to launder several hundred million dollars.
TD Bank is the largest bank in the country’s history to plead guilty to money laundering, according to the US Department of Justice, which accuses the company of failing to monitor transactions from 2014 to 2023.
The group has committed to fundamentally restructuring its compliance procedures and accepted a five-year probationary period.
The agreement also plans to cap the size of its US assets at the level they reached at the end of September, or $434 billion.
This provision effectively prevents TD Bank from continuing its growth in the United States, where it has more than 1,100 branches and approximately 10 million customers.
Among the clients suspected of illegal activities were drug traffickers, explained the American Minister of Justice, Merrick Garland, during a press briefing.
These involved Chinese producers of synthetic drugs, including the powerful opiate fentanyl, associated with Mexican traffickers, who transported the goods to the United States.
Several employees of the bank were implicated by the American authorities for having facilitated or even contributed to the laundering of drug money, some in exchange for gift certificates worth several tens of thousands of dollars in total.
Two of them have already been charged, the minister said, adding that the investigation was not yet completed.
According to him, “senior managers, including the person who became the anti-money laundering manager, knew that the supervisory framework had serious problems, but the bank did not seek to remedy them.”
“A difficult chapter”
Merrick Garland cited the example of a drug trafficker intermediary who, after going through several financial institutions, had chosen to work only with TD Bank, which had “the most permissive regulations and procedures” regarding money laundering. .
The department has identified three organizations suspected of illegal activities which, in total, channeled some $670 million through their accounts at TD Bank.
“We are clearly showing what we expect from financial institutions and what the consequences are for failing to comply with compliance rules,” said Merrick Garland’s deputy, Lisa Monaco.
“When it comes to control, there are two possible paths: invest (in detection and alert mechanisms) or you will assume the consequences,” she continued.
Informed of the investigation and having agreed to collaborate with the Ministry of Justice, TD Bank had already provisioned 4.2 billion Canadian dollars, or approximately 3 billion US dollars, for the payment of these penalties, according to its quarterly accounts. published at the end of August.
“We take responsibility for having failed to meet the obligations of the American anti-money laundering program and are making the investments, changes and improvements necessary to comply with it,” commented, in a press release, the director general, Bharat Masrani.
“This is a difficult chapter in the history of our bank,” admitted the manager. “These failings occurred during my tenure and I apologize to everyone involved.”
Across the entire group, TD Bank is the second largest Canadian bank by asset size, behind the Royal Bank of Canada (RBC).
Even though the lawsuits and the likely amount of penalties were known, investors reacted poorly to Wednesday’s announcement.
Around 3:30 p.m., the bank’s stock fell 5.30% on the New York Stock Exchange.
