TD Bank in Canada is anticipated to incur a substantial monetary penalty due to deficient anti-money laundering controls, as disclosed by the financial-crimes watchdog in a recent report by the Globe and Mail.
Sources suggest that the monetary penalty could surpass C$10 million ($7.44 million), potentially setting a record as the largest penalty ever imposed on a Canadian financial institution by the anti-money laundering agency. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) concluded its evaluation of Bank’s anti-money laundering compliance in late 2023, determining it to be unsatisfactory, according to five individuals familiar with the matter.
TD Bank’s Response
Bank responded by acknowledging the need for improvements in its anti-money laundering (AML) program and has appointed new executives and advisers to lead these efforts. The institution stated that it is actively collaborating with law enforcement and regulators, including FINTRAC, to combat criminal activity.
FINTRAC, however, is restricted from disclosing specific details about compliance actions against a particular business. The heightened scrutiny by the watchdog comes in the wake of expanded powers related to national security granted by the federal government.
In a recent development, Royal Bank of Canada and CIBC, two major banks in the country, were fined a total of approximately C$9 million by FINTRAC for various violations, including the failure to submit suspicious transaction reports – a precedent-setting move by the agency.
Adding to Bank’s challenges, it is also under investigation by the U.S. Department of Justice regarding its anti-money laundering practices. This inquiry follows the cancellation of the proposed First Horizon acquisition by Bank.
