TD Bank Faces Anti-Money Laundering Probes From US Regulators

TD Bank

TD Bank has disclosed that it is cooperating with inquiries from regulators and law enforcement regarding its compliance with anti-money laundering rules.

The bank made this disclosure in its report to shareholders for the third quarter that was released Thursday (Aug. 24), stating that it may face penalties as a result of the ongoing probe. TD Bank also said that it is actively working to enhance its Bank Secrecy Act/anti-money laundering compliance program.

“The Bank has been responding to formal and informal inquiries from regulatory authorities and law enforcement concerning its Bank Secrecy Act/anti-money laundering compliance program, both generally and in connection with specific clients, counterparties or incidents in the U.S., including in connection with an investigation by the United States Department of Justice,” TD Bank said in its report to shareholders.

“The Bank is cooperating with such authorities and is pursuing efforts to enhance its Bank Secrecy Act/anti-money laundering compliance program. While the ultimate outcome of these inquiries and investigations are unknown at this time, the Bank anticipates monetary and/or non-monetary penalties to be imposed.”

This news comes after TD Bank’s deal to acquire First Horizon Bank fell apart earlier this year due to regulators being slow to give it their approval, Bloomberg reported Thursday. An unnamed source told Bloomberg at the time that the lack of timely approval was due to regulators’ concerns about the bank’s handling of suspicious customer transactions.

TD Bank and First Horizon Bank called off their $13.4 billion merger on May 4, saying the decision came after TD told First Horizon that TD didn’t have a timetable for regulatory approvals.

“Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement,” the banks said at the time in a joint statement.

The Wall Street Journal reported four days later, on May 8, that regulators’ concerns about TD Bank’s anti-money laundering practices ended the planned acquisition. The report cited unnamed sources.

A week after that, on May 15, a Barclays analyst told BNN Bloomberg Television that the regulatory challenges TD Bank faced when trying to buy First Horizon Bank will keep it from making acquisitions of other retail banks for three to five years.