One litigation analyst says Toronto-Dominion Bank’s final settlement related to U.S. compliance lapses could be as high as US$4 billion.
Bloomberg News reported in August that TD said it anticipated having to pay a total of more than $3 billion in penalties related to U.S. compliance lapses amid allegations that it failed to catch money laundering and financial crimes at branches south of the border.
“The $3 billion in provisions that TD has taken over the last couple of quarters, that sets a floor for what the potential monetary penalty is going to be, but we don’t really know what the final number is going to be,” Elliott Stein, a senior litigation analyst of financials at Bloomberg Intelligence, said in an interview with BNN Bloomberg on Friday.
Stein said there is not a precedent for anti-money laundering penalties in amounts this high “for any bank at all,” and anti-money laundering violations typically result in penalties in the “hundreds of millions of dollars.”
“So this TD case, based on the provisions that they’ve taken, really is going to set a new bar,” he said.
Stein noted that in a 2012 anti-money laundering case, HSBC took about $1.5 billion in provisions in two steps ahead of a final settlement with a $1.9 billion penalty.
“So based on those numbers, we do think that TD could wind up having to pay more than the $3 billion that it has provision for,” he said.
Based on provisions TD Bank has taken so far, Stein said it appears to be a “more egregious case.”