TD Bank has agreed to a record $3bn penalty after admitting to violations of US federal anti-money laundering (AML) laws.
Prosecutors revealed that for nearly a decade, the bank lacked effective safeguards against money laundering. Even when staff members reported blatant instances of suspicious activity, such as a customer making daily cash deposits of $1m, the bank failed to take action.
TD Bank and some of its US subsidiaries have agreed to orders with the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board and the Financial Crimes Enforcement Network (FinCEN).
Additionally, the bank and its subsidiaries have entered into plea agreements with the Department of Justice’s Criminal Division, particularly with the Money Laundering and Asset Recovery Section, as well as the US Attorney’s Office for the District of New Jersey.
Bharat Masrani, Group President and CEO at TD Bank Group, said: “We have taken full responsibility for the failures of our US AML programme and are making the investments, changes and enhancements required to deliver on our commitments. This is a difficult chapter in our Bank’s history. These failures took place on my watch as CEO and I apologise to all our stakeholders.
“I want to thank our colleagues, who continue to demonstrate their dedication and who play an important role in preventing criminal activity.”
In an effort to fix its wrongs, TD Bank has launched multiple initiatives to enhance its AML programme. The bank appointed a new US Head of Financial Crime Risk Management and BSA/AML Officer, along with adding 40 leaders and over 700 AML specialists to strengthen its team.
To improve oversight, the bank has established a robust accountability structure across all three lines of defence, creating a dedicated committee for AML/BSA oversight at the US boards. Additionally, new standards, processes and training have been introduced to better prevent, detect and assess financial crime risks.
The bank has also deployed advanced data-driven technology solutions to enhance detection and analytics, focusing on sustainable risk mitigation strategies.
“Money laundering is a serious global threat, and our US operation did not maintain an adequate AML programme to thwart criminal activity. The Board has and continues to take action to address these failures and hold those responsible accountable,” said Alan MacGibbon, Chair of the Board at TD Bank Group.
“We have appointed new leaders across our US operations, overhauled our US AML team, and prioritised investments to drive the required changes. Enhancing our programme and meeting our obligations today and into the future is the number one priority of the Board and management.”
