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Exclusive-TD Bank appoints compliance monitor after $3 billion US penalty for money laundering
Published by Global Banking and Finance Review
Posted on February 27, 2025
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Published by Global Banking and Finance Review
Posted on February 27, 2025
By Nivedita Balu
TORONTO (Reuters) - Canadian lender TD Bank appointed Guidepost Solutions as the compliance monitor for its anti-money laundering program after U.S. regulators hit the lender with $3 billion in penalties last year.
Guidepost Solutions will monitor TD's business in the United States as part of a multi-year program to fix TD's anti-money laundering problems and strengthen its controls, Chief Financial Officer Kelvin Tran told Reuters in an interview.
The costs for the monitor will be paid from a $500 million pot that TD has earmarked for compliance work. The details on the monitor are being reported by Reuters for the first time.
"AML remediation is our top priority at TD, and we're making steady progress," Tran said.
Guidepost Solutions is a U.S.-based company with more than 250 people, including former federal prosecutors and intelligence officers, according to its website. It specializes in investigations, monitoring and compliance.
TD became the largest bank in U.S. history to plead guilty to violating a federal law aimed at preventing money laundering, and agreed to pay more than $3 billion in penalties to resolve the charges in October.
The U.S. Department of Justice and Financial Crimes Enforcement Network (FinCEN) ordered TD at the time to appoint a monitor, typically a third-party consultant or law firm, to observe its operations, track its progress on risk and controls, and report to regulators.
Regulators said TD ignored red flags from high-risk customers and created a "convenient" environment for bad actors to exploit. It facilitated more than $650 million in transactions to launder funds on behalf of people selling fentanyl and other deadly drugs, while its employees took bribes from criminal gangs, the officials said.
TD has since announced the departure of CEO Bharat Masrani, who also led its U.S. unit before taking helm. Its global AML officer Herb Mazariegos also left, and the bank has laid off several other executives and cut salaries.
(Reporting by Nivedita Balu in Toronto, editing by Lananh Nguyen and David Evans)