The Federal Reserve Board on Thursday fined Toronto-Dominion Bank $123.5 million for violations related to anti-money laundering laws. The Board is also requiring TD to implement enhanced measures to comply with anti-money laundering laws and to correct its risk management deficiencies.
TD failed to conduct adequate risk management and oversight of its retail banking operations in the United States, resulting in a U.S. subsidiary being used to launder hundreds of millions of dollars in illicit proceeds. The Board's action will help ensure that TD operates in compliance with all U.S. laws and regulations.
The Board is requiring TD to:
- Establish a new office in the United States dedicated to remediating the deficiencies identified in the order;
- Relocate to the United States the parts of its anti-money laundering compliance program that are responsible for complying with U.S. law. This program will be subject to oversight by U.S. regulators;
- Certify that sufficient resources and attention are allocated to correcting the firm's anti-money laundering deficiencies prior to issuing any dividends or capital distributions; and
- Undertake a thorough and independent review of the firm's board of directors and management to ensure adequate oversight of the U.S. operations.
Canada's Office of the Superintendent of Financial Institutions, the home country supervisor of TD, can act in the implementation of these requirements as permitted by its legal authority.
This action is being taken in conjunction with criminal and regulatory actions that are being taken by the U.S. Department of Justice, the U.S. Attorney's Office for the District of New Jersey, the Department of the Treasury's Financial Crimes Enforcement Network, and the Office of the Comptroller of the Currency. The penalties announced by the agencies total approximately $3.09 billion. The bank is also pleading guilty to criminal charges brought by law enforcement authorities.
