TD Bank faces hefty penalties in worst-case scenario
Banking analyst warns of potential impact of money laundering investigation
Probe linked to laundering of illicit fentanyl profits
WEB TORONTO, April 30, 2024 /CNW/ - TD Bank Group ("TD" or the "Bank") (TSX: TD) today announced that it has taken an initial provision of US$450 million in connection with ongoing U.S. regulatory and law enforcement probes into its anti-money laundering and terrorist financing compliance. The Bank also disclosed that the Financial Transactions and Reports Analysis Centre of Canada ("FINTRAC") levied a $92-million penalty against the Bank on Thursday for non-compliance with money laundering and terrorist financing measures.
The U.S. probes are related to TD's exposure to money laundering activities involving illicit fentanyl profits. A banking analyst has warned that the Bank could be hit with a worst-case scenario in penalties, which could have a significant impact on its financial performance. The analyst cited the Bank's significant exposure to the U.S. market and its history of regulatory compliance issues.
TD has set aside $450 million for potential fines from U.S. regulators. However, the analyst warned that the Bank could face additional penalties, including criminal charges, which could further damage its reputation and financial standing.
The Bank is cooperating with the U.S. authorities and has taken steps to strengthen its anti-money laundering and terrorist financing compliance program. However, the outcome of the probes remains uncertain, and the Bank could face significant financial and reputational damage.
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