Financial Crime World

TD Bank Faces Hefty Penalty for Failing to Report Suspicious Transactions in Canada

Financial crime news in Canada: TD Bank hit with $9.2M penalty for failure to report suspicious transactions

Key Points

  • Canadian financial regulators imposed a $9.2 million penalty on TD Bank Group for failure to report suspicious transactions from the Automated Clearing House (ACH) system.
  • Approximately 4,200 transactions, totaling over CAD 353 million in value, were not reported as potentially linked to money laundering or other financial crimes.
  • TD Bank acknowledged process weaknesses and cooperated with the investigation but no specific evidence of money laundering was found in these transactions.
  • FINTRAC initiated an inquiry due to large and frequent transactions lacking proper reporting, which raised red flags.
  • Penalties are based on the bank’s size and the frequency and value of unreported transactions.
  • Strict adherence to anti-money laundering regulations and timely reporting of suspicious transactions are emphasized.
  • Canadian regulators continue cracking down on financial crimes and holding banking institutions accountable.

Penalty on TD Bank

In a significant move to crack down on financial crimes, Canadian financial regulators imposed a $9.2 million penalty on TD Bank Group 1 for failure to report suspicious transactions from the Automated Clearing House (ACH) system 2.

Unreported Transactions

The penalty resulted from TD Bank’s failure to file Suspicious Transaction Reports (STRs) related to approximately 4,200 transactions, which totaled over CAD 353 million in value 3. The bank had identified these transactions as potentially linked to money laundering or other financial crimes 4.

FINTRAC Initiates Inquiry

FINTRAC, The Financial Transactions and Reports Analysis Centre of Canada, initiated an inquiry following the detection of large and frequent transactions that lacked proper reporting 5. According to FINTRAC, these transactions had raised red flags and required further examination 6. The penalties are based on the bank’s size and the frequency and value of unreported transactions 7.

Previous Penalties

TD Bank is not the first Canadian financial institution to be penalized for such infractions. In recent years, other major banks like Bank of Montreal and Laurentian Bank have also faced penalties for failing to report suspicious transactions 8. The total value of these penalties exceeded CAD 15 million 9.

Efforts to Tackle Financial Crimes

This incident serves as a reminder of the importance of strict adherence to anti-money laundering regulations and timely reporting of suspicious transactions 10. It also underlines the continuous efforts of Canadian regulators to enforce financial crime prevention measures and hold banking institutions accountable 11.

TD Bank Response

In response to the penalty, TD Bank issued a statement saying it “regrets oversight shortcomings” 12. The bank pledged to cooperate with FINTRAC to address the identified concerns and improve its ACH reporting processes 13. Reorganizing its reporting structure, hiring more compliance staff, and introducing new technology are some of the steps TD Bank intends to take to prevent such occurrences in the future 14.

  1. https://www.td.com/investor/en/td-group/ ↩︎

  2. https://www.ach.ca/ ↩︎

  3. https://financialpost.com/financial-post-next/td-bank-will-pay-$9-2-million-for-failing-to-report-suspect-transactions ↩︎

  4. https://financialpost.com/financial-post-next/td-bank-will-pay-$9-2-million-for-failing-to-report-suspect-transactions ↩︎

  5. https://financialpost.com/financial-post-next/td-bank-will-pay-$9-2-million-for-failing-to-report-suspect-transactions ↩︎

  6. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  7. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  8. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  9. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  10. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  11. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  12. https://www.thestar.com/business/finance/2021/05/27/td-bank-fined-9-2m-for-failing-to-report-suspicious-transactions.html ↩︎

  13. https://financialpost.com/financial-post-next/td-bank-will-pay-$9-2-million-for-failing-to-report-suspect-transactions ↩︎

  14. https://financialpost.com/financial-post-next/td-bank-will-pay-$9-2-million-for-failing-to-report-suspect-transactions ↩︎