Money-Laundering Investigation: Is TD Bank Stock in Trouble? (2024)

FAQs

Money-Laundering Investigation: Is TD Bank Stock in Trouble? ›

In a word, yes. While most Canadian bank stocks have started to slump recently, TD has been going down for weeks. It's trading at a discount of about 30% from its 2022 peak.

Canadian banks, including TD, are typically considered blue-chip stocks and are often seen as safe investments. However, scandals like this are rare in the Canadian banking sector. The current situation then could lead investors to consider TD stock an opportunity to buy at a historic discount.

Toronto-Dominion is under investigation by the US Department of Justice, bank regulators and the Treasury Department over allegations of money laundering and other financial crimes at several of the bank's US branches.

Still at the highest level among peers, Fitch believes that a larger capital buffer is appropriate at this juncture to allow TD to provision for potential regulatory penalties. Stable Funding and Liquidity Profile: TD's funding and liquidity profile is stable and in line with peers.

A proposed shareholder class action for alleged secondary market misrepresentation is underway against TD Bank, and certain directors and officers, over the bank's weak anti–money laundering (AML) controls and the impact on the bank's operations.

As long as you choose a bank that has Federal Deposit Insurance Corporation (FDIC) insurance, both your checking and savings accounts will have protection. FDIC insurance covers deposits of up to $250,000 per depositor, per bank, per ownership category, in the event that an FDIC-insured depository institution fails.

TD Analyst Recommendation Trends

In the current month, TD has received 14 Buy Ratings, 16 Hold Ratings, and 1 Sell Ratings. TD average Analyst price target in the past 3 months is C$88.88.

All deposits and deposit products are FDIC-insured, up to $250,000 per depositor, per ownership category.

Based on the latest financial disclosure, Toronto Dominion Bank has a Probability Of Bankruptcy of 9.0%. This is 81.97% lower than that of the Banks sector and significantly higher than that of the Financials industry. The probability of bankruptcy for all Canada stocks is 77.4% higher than that of the company.

TD faces a U.S. regulatory probe on allegations that Chinese drug traffickers used the bank to launder at least $650 million from 2016 through 2021 and that an employee took a bribe to facilitate laundering of drug money.

Who was the former TD Bank employee charged with money laundering? ›

The investigation is expected to result in financial penalties of as much as $2 billion. In Hollywood, Florida, now-former retail banker Gerardo Aquino Vargas allegedly provided services for criminals to send money to Colombia.

Is TD Bank safe? Yes, TD Bank is FDIC-insured up to the amount allowed by law: $250,000 per depositor, per account. Yes, TD Bank is FDIC-insured up to the amount allowed by law: $250,000 per depositor, per account.

HSBC laundered over $881 million for Mexico's Sinaloa and Colombia's Norte del Valle drug cartels. HBC's weak AML controls led to illegal fund transfers and currency exchanges through their correspondent banking services.

TD Bank's yield is high again

The company has increased the dividend each year since, and the stock has risen to account for that dividend growth. I'm soundly in the plus column on my investment. But TD Bank didn't have the best year in 2023, so the stock has pulled back, pushing the yield into the 5% space.

TD Ameritrade is a member of the Securities Investor Protection Corporation (“SIPC”), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).