Toronto-Dominion Bank experienced the “darkest day” in its 170-year history when it reached a US$3.1 billion settlement over the company’s failure to catch and stop money laundering at numerous U.S. branches, board Chair Alan MacGibbon said Thursday.
MacGibbon’s comments came during the bank’s annual general meeting in Toronto, which marked the first time executives and directors have faced shareholders in person since the October settlement with U.S. law enforcement and regulators.
“I apologize to all investors,” MacGibbon said. The settlements were “extraordinarily painful” for the bank, which has roots dating back to 1855, and Toronto-Dominion is committed to change, he said. MacGibbon cited renewal at the board level, with five directors deciding not to stand for reelection at Thursday’s meeting, and other steps aimed at taking accountability.
The criminal and civil resolutions stemmed from sweeping investigations into multiple criminal money-laundering rings using Toronto-Dominion to launder hundreds of millions of dollars. It became the first bank in the U.S. to plead guilty to conspiracy to commit money-laundering and, on top of the fines, it faces an asset cap on growth in its American retail-banking division.
The company’s annual meeting lasted three hours and was dominated by investor questions about the money-laundering scandal, with one shareholder attracting a round of applause after a series of questions about how the events unfolded and the bank’s response.
MacGibbon himself has said he’ll step down as chair by the end of this year. He’s held the role for just over a year, but has been a board member since 2014.
In the wake of changes at the board and after discussions with the bank, shareholder group Investors for Paris Compliance withdrew an earlier proposal calling for an outside review of board governance and the bank’s criteria for choosing directors.
It was the first annual meeting for Chief Executive Officer Raymond Chun, who took the helm at the bank in February, almost three months earlier than planned. Former CEO Bharat Masrani remains with TD as an adviser through July.
Chun called the money-laundering failures “unacceptable” and said the bank has been decisive in its response. “We are making consistent progress every day, with more work ahead.”
Christine Dobby, Bloomberg News
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