$3B TD Bank Settlement Highlights Anti-Money Laundering Violations And Compliance Failures

According to an article by the law firm Bradley Arant Boult Cummings, TD Bank has agreed to pay over $3.09 billion in penalties to resolve investigations by the US Department of Justice (DOJ) and other regulatory agencies into significant anti-money laundering violations. 

Notably, TD Bank became the first bank to plead guilty to felony conspiracy to commit money laundering. The settlement revealed systemic failures in TD’s anti-money laundering (AML) compliance program. From 2014 to 2022, the bank failed to update its transaction monitoring, resulting in the laundering of $671 million through its accounts, including for international drug traffickers.

The consequences extend beyond financial penalties. The Office of the Comptroller of the Currency (OCC) imposed a $434 billion asset cap, restricting TD Bank’s growth until it remediates its compliance issues. 

Additionally, the DOJ was critical of TD Bank’s inadequate compliance investments, highlighting the risks of a “flat-cost” approach to compliance amid expanding business operations. The settlement also emphasized the importance of voluntary self-disclosure, as TD Bank did not receive credit for failing to disclose its misconduct, missing a potential penalty reduction.

Moreover, TD Bank clawed back bonuses from executives, including its CEO, under a new DOJ pilot program aimed at holding individuals accountable for corporate misconduct. 

The article notes that the TD Bank case is a strong reminder for financial institutions to maintain dynamic, well-funded compliance programs that evolve with business growth and risks. It highlights the DOJ’s increasing focus on individual accountability and reinforces the critical importance of proactive AML compliance efforts.