Canada’s Toronto-Dominion Bank (TD), commonly known as TD Bank Group, has pled guilty to multiple criminal charges related to money laundering in the U.S. and agreed to pay $3 billion in fines.
Specifically, TD Bank has acknowledged failing to monitor money laundering by drug traffickers and other criminals within America. The U.S. Department of Justice had brought multiple charges against the bank in connection with the money laundering case.
Beyond the hefty $3 billion in penalties, TD Bank will also have limits imposed on its growth and expansion in the U.S. by the Office of the Comptroller of the Currency. Going forward, the total assets of TD Bank’s two U.S. subsidiaries will not be able to exceed $434 billion.
In announcing the settlement’s terms, U.S. Attorney General Merrick Garland said, “By making its services convenient for criminals, TD Bank became one.”
Internal Failures at TD Bank
Garland went on to harshly criticize TD Bank for a lack of proper internal controls and a failure of leadership among the lender’s senior executives. The Justice Department said that, over a six-year period, TD Bank failed to monitor $18.3 trillion in customer activity, which allowed three money laundering networks to transfer $670 million through accounts held at the bank.
As part of the settlement, TD Bank, which is the second-largest bank in Canada and 10th biggest in the U.S., will pay $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network. It is the largest such penalty ever imposed by the Financial Crimes Enforcement Network. TD stock fell 5% on news of the money laundering settlement and fine.
Is TD Stock a Buy?
TD Bank stock has a consensus Moderate Buy rating among 12 Wall Street analysts. That rating is based on six Buy and six Hold recommendations assigned in the last three months. There are no Sell ratings on the stock. The average TD price target of C$87.51 implies 7.04% upside potential from current levels.
