Canada TD Bank to receive USD 7.4 million penalty for faulty policies

Friday 2 February 2024 15:35 CET | News

Canada-based TD Bank has received a significant monetary penalty for faulty anti-money laundering controls after an examination by the financial crime institutions. 

According to a report by the Globe and Mail, Toronto-Dominion Bank is facing this monetary sanction as the Canadian organisation responsible for tackling financial crimes discovered during an investigation that the bank's anti-money-laundering regulations are inadequate. These allegations came from five people familiar with the matter, who, for the moment, remain unknown to the public media. 

TD Bank has received a significant monetary penalty for faulty anti-money laundering controls after an examination by the financial crime institutions


The penalty could exceed USD 7.4 million 

The penalty is expected to exceed USD 7.4 million, which could be the largest penalty imposed on a Canadian financial institution by the country's anti-money laundering agency. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which completed an assessment of the lender in late 2023, found its anti-money laundering compliance to be unsatisfactory. On this, TD Bank responded that it is prioritising improving its anti-money laundering program and has appointed new executives and advisers with larger expertise to head those efforts, process redesign, and training.

As the official announcement shows, FINTRAC has stepped up monitoring after the federal government added new powers relating to national security. In December 2023, the agency fined another two of the country's big banks a total of about USD 7.4 million for violations that included failing to submit suspicious transaction reports, the first time it has taken such action. TD Bank is also facing a rare probe and a likely fine by the US Department of Justice related to its AML practices, shortly after it called off its First Horizon acquisition. TD initially said it was unable to elaborate on the regulatory issues that scuttled the deal, but later revealed it anticipated those US probes to result in a fine.

FINTRAC, which has already shared its preliminary findings with TD, is preparing its final report about the compliance deficiencies. The federal regulator is expected to publicly announce details of the violations and the financial penalty over the coming months. The Globe can’t point to the sources that disclosed the information because they were not authorised to speak to the media about regulatory issues but confirmed that the bank is entitled to an appeals process that has yet to expire.

Moreover, due to confidentiality requirements in Canadian legislation, sorting responsibilities concluded that the complete FINTRACS examinations of TD would remain undisclosed to the public. This stipulation restricts both regulators and banks from making any statements regarding ongoing investigations or regulatory actions. Nonetheless, authorities in both countries have established arrangements enabling them to exchange financial data and compliance details on financial entities.

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Keywords: penalty, money laundering, financial crime, financial sanctions, financial institutions
Categories: Fraud & Financial Crime
Companies: TD Bank
Countries: Canada
This article is part of category

Fraud & Financial Crime

TD Bank

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