FINTRAC Fines TD Bank with $6.7M for Failure to Report Suspicious Transactions
May 3, 2024
Canadian anti-money laundering agency FINTRAC fined Toronto-Dominion (TD) Bank approximately C$9.2 million (US$6.71 million) for violating five AML regulations. The FINTRAC imposed the administrative monetary penalty on TD Bank on April 9, 2023, after a compliance examination.
FINTRAC found that TD Bank committed the following AML violations:
- 20 suspicious transactions were not reported when there was a doubt of money laundering or terrorist financing.
- The risks associated with money laundering or terrorist financing were not adequately assessed and documented. Additionally, they didn’t update the risk assessment for 96 clients.
- The bank has not taken the necessary special measures for 85 high-risk customers.
- The bank didn’t conduct ongoing monitoring of business relationships.
- TD Bank failed to keep records of the measures taken and information obtained during the ongoing monitoring of business relationships.
During its review, Fintrac identified a politically exposed foreign person who was able to transact for more than two years without the bank obtaining the required details from the client.
TD Bank spokesperson Lisa Hodgins stated,
“As part of their regular review of Canadian financial entities, FINTRAC identified five specific administrative findings that require our attention. Improvements have been made and more are underway.”
FINTRAC previously fined Royal Bank of Canada and CIBC a total of C$9 million for similar violations, including failure to report suspicious transactions.
TD Bank has come under scrutiny both domestically and in the US for weakness in the AML compliance program, which affects stock performance.
The U.S. Department of Justice is investigating TD Bank on claims that Chinese drug traffickers used the bank to launder money from fentanyl sales. This scrutiny led TD to set aside $450 million this week for potential penalties related to discussions with a U.S. regulator regarding its AML compliance program.
National Bank analyst Gabriel Dechine indicated that the total fines could be higher than market expectations, at between $500 million and $1 billion.
CEO Bharat Masrani acknowledged shortcomings in TD Bank’s AML compliance program and promised improvements.
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