TD Bank Slapped with $9.2 Million Penalty for Money Laundering Violations Amid U.S. Compliance Probe

Canada’s financial intelligence authority has imposed a significant penalty of $9.2 million on The Toronto-Dominion Bank for violating regulations concerning money laundering and terrorist financing, amidst concurrent compliance investigations in the United States.

This penalty, issued by the Financial Transactions and Reports Analysis Centre of Canada (Fintrac), follows previous fines of $7.5 million against RBC and $1.3 million against CIBC, announced in December.

Fintrac revealed that the penalty on TD was due to several shortcomings, including failure to report suspicious transactions when necessary, inadequate assessment and documentation of risks related to money laundering and terrorist financing, and failure to implement prescribed measures for high-risk scenarios.

The sanction against TD coincides closely with the bank’s recent disclosure of setting aside an initial provision of US$450 million in connection with an ongoing U.S. regulatory investigation into its anti-money laundering compliance practices.

According to TD, discussions with three U.S. regulatory bodies and the Department of Justice are ongoing, with expectations of further financial penalties.

The bank acknowledged that its existing program lacked efficacy in monitoring, detecting, reporting, and addressing suspicious activities. Efforts are underway to rectify these deficiencies.

Ajay Kumar