Market Chatter: TD Money-laundering Fines May Reach US$4 Billion, Jefferies says
09:14 AM EDT, 06/06/2024 (MT Newswires) -- Fines against Toronto-Dominion Bank tied to U.S. money-laundering probes may total as much as US$4 billion following fresh allegations involving the lender, according to Jefferies Financial Group Inc. analysts, Bloomberg News is reporting, noting that is double previous estimates of the potential impact on Canada's second-largest lender.
A now-departed Toronto-Dominion branch employee in Florida took a series of $200 bribes to help clients move millions of dollars to Colombia by skirting anti-money-laundering defenses, prosecutors allege in a case first reported this week by Bloomberg News. In another recent case, a former branch employee in New York admitted to bypassing the bank's compliance measures to defraud a customer, the report said.
Bloomberg noted TD is under investigation by the U.S. Department of Justice, bank regulators and the U.S. Treasury Department over allegations of money laundering and other financial crimes at several of the bank's U.S. branches.
"While our previous estimate for the regulatory fines was at $2 billion, given that a third AML issue has been reported, we now believe that this estimate could be low," Jefferies analysts led by John Aiken wrote in a report Wednesday. "Although a $4 billion fine does seem a bit high at this juncture, we cannot deny that it is still within the realm of possibilities, potentially eroding all of TD's current excess capital."
(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.