Canada's TD Bank to plead guilty to US charges it failed to properly monitor money laundering, sources say

By Nivedita Balu, Chris Prentice and Karen Freifeld

TORONTO/NEW YORK (Reuters) - TD Bank will pay $3 billion in U.S. penalties, plead guilty to criminal charges that it failed to do enough to prevent money laundering, and accept an asset cap limiting its growth, two sources familiar with the matter said on Thursday.

The bank has agreed to shell out $3 billion in combined penalties, the two sources and a separate source familiar with the matter said. That would be paid to U.S. banking regulators, the Justice Department and Treasury Department's Financial Crimes Enforcement Network, the two sources said, confirming details reported on Wednesday in the Wall Street Journal.

Those sources said the deal would also include the imposition of an asset cap, a rarely used regulatory tool that deals a major blow to TD as it has been seeking ways to grow its footprint in the United States.

The deal, expected to be made public later on Thursday, will resolve investigations by the Justice Department, the OCC and Treasury's Financial Crimes Enforcement Network (FinCEN), the bank also agreed to take independent monitoring, the two sources said.



TD, Canada's second and United States' tenth biggest bank, first revealed it was responding to inquires from regulators and law enforcement last year, just months after it terminated its $13 billion acquisition of U.S. regional lender First Horizon (NYSE:FHN ).

Since then, TD has set aside $3 billion to cover for penalties, spent millions to strengthen its compliance programs, fired dozens of staff at its U.S. branches and named its Canadian personal banking head as its new CEO, distancing its new chief from the money laundering scandal.

Source: Investing.com