https://www.mpamag.com/ca/news/general/td-could-be-staring-at-4bn-money-laundering-fine-analysts-say/492195

Analysts have doubled their initial estimate of potential fines against Toronto-Dominion Bank (TD Bank) related to US money-laundering probes, now projecting a total as high as $4 billion.

The increased estimates from Jefferies Financial Group Inc. analysts comes after new allegations surfaced involving former TD Bank employees in Florida and New York, who allegedly facilitated money laundering by bypassing the bank's anti-money-laundering (AML) defences.

“While our previous estimate for the regulatory fines was at $2 billion, given that a third AML issue has been reported, we now believe that this estimate could be low,” Jefferies analyst John Aiken said in a statement. “Although a $4 billion fine does seem a bit high at this juncture, we cannot deny that it is still within the realm of possibilities, potentially eroding all of TD’s current excess capital.”

TD Bank is currently under investigation by the US Department of Justice, bank regulators, and the Treasury Department regarding allegations of money laundering and other financial crimes at multiple US branches. At least four federal cases so far involve claims of serious employee misconduct.

One case reported by the Wall Street Journal alleged TD branches laundered $653 million in drug money.

In response to the allegations, TD Bank had set aside $450 million for potential regulatory fines in April. However, analysts believe this amount may be insufficient given the escalating number of cases.

The bank is also facing a proposed shareholder class-action lawsuit filed in the Ontario Superior Court of Justice in Toronto, alleging that the bank misrepresented its AML controls and the potential impact on its US operations.

TD Bank spokesperson Lisa Hodgins said in a statement, "TD’s disclosures and public statements are and have been accurate and consistent with our obligations under the securities laws and responsibilities to our shareholders. We will contest the assertions of these proposed class actions, which are without merit."