Late last week, TD Bank pleaded guilty to criminal money laundering charges in the US, as part of a settlement requiring it to pay a $3 billion fine and to abide by an asset cap that limits its growth.
The deal was part of a coordinated resolution with the Department of Justice, the Federal Reserve, the Office of the Comptroller of the Currency, and the Treasury's Financial Crimes Enforcement Network. "TD Bank created an environment that allowed financial crime to flourish," Attorney-General Merrick Garland said. “By making its services convenient for criminals, it became one.”
According to the regulators, TD Bank failed to monitor more than 92% of its transaction volume from 2014 to 2023 — about $18.3 trillion — due to "long-term, pervasive and systemic deficiencies." As a result, criminals were able to launder more than $670 million through the bank. "This is a difficult chapter in our bank's history," TBharat Masrani, CEO of TD Bank, said in a statement. “These failures took place on my watch... and I apologize to all our stakeholders.”
In our 2022 Deeper Dive, "The Costs of Misconduct," we discuss the massive fines and societal impact stemming from misconduct in the financial sector, and whether they can be treated even tacitly as "costs of doing business."
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