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TD Bank Overhauls Anti-Money Laundering Processes Amid Regulatory Scrutiny

Toronto-Dominion Bank (TD Bank) reportedly fired more than a dozen employees and began an overhaul of its processes as part of its efforts to address earlier failings in its anti-money laundering (AML) program.

As TD faces regulatory scrutiny and legal challenges, it has embarked on a comprehensive overhaul of its AML practices, The Wall Street Journal (WSJ) reported Thursday (May 23).

The bank faced significant challenges when problems with its AML program were exposed, leading to investigations by U.S. regulators and the Justice Department, according to the report. In response, the bank has initiated a thorough review of its program and implemented changes to enhance its effectiveness.

TD President and CEO Bharat Masrani emphasized the seriousness of the situation and the actions the bank has taken Thursday during the bank’s quarterly earnings call, the report said.

The bank terminated more than a dozen individuals, per the report. Criminal charges were brought against some employees, while others faced disciplinary measures for minor infringements.

To address the shortcomings in its AML program, TD has strengthened its leadership in this area, according to the report. The bank has brought in top talent with experience in transforming and leading AML programs at major banks. These individuals possess technical expertise and law enforcement backgrounds.

TD is subject to multiple AML investigations in the U.S., and it has set aside $450 million to resolve one of these inquiries, the report said. Additionally, a Canadian banking regulator imposed a fine on TD for its failure to file suspicious-activity reports and document risks related to money laundering and terrorist activity.

The financial impact of these penalties has weighed on TD’s earnings, as reflected in its latest quarterly results, per the report. During the conference call with analysts, Masrani expressed his commitment to resolving the investigations promptly. TD has been cooperating closely with authorities, providing extensive documentation and internal video recordings related to the matter.

TD has invested 500 million Canadian dollars (about $365 million) in its AML program, according to the report. The bank has made tangible progress by introducing new technologies and refining its alert systems to tailor them to specific areas of operation and branches.