TD’s quest to remediate anti-money laundering woes cost the bank $86 million in the first fiscal quarter of 2025, slightly less than what it spent on the matter in the fourth quarter, the bank’s U.S. CEO, Leo Salom, said Thursday.
On an earnings call, Salom and new CEO Raymond Chun reiterated that AML remediation is the bank’s “top priority.”
The Justice Department and Financial Crimes Enforcement Network jointly selected Guidepost Solutions as the compliance monitor overseeing the growth of TD’s AML program, Chun said.
Guidepost Solutions, based in Chicago, employs more than 250 people, including former federal prosecutors, intelligence officers and special agents from CIA, FBI and U.S. Secret Service, according to its website.
“[W]e look forward to working with them to strengthen and enhance our U.S. [Bank Secrecy Act]/AML compliance program,” Chun said.
The focus follows more than $3 billion in penalties and a $434 billion cap on U.S. retail assets, related to TD’s AML issues, which came to light during an investigation into the fentanyl trade.
TD is now working on centralizing all investigative cases into a new single case management system, and has designed machine-learning tools to analyze customer data in an effort to detect potentially illicit activity, Salom said. The bank expects to implement these capabilities in the third quarter.
“Collectively, building these capabilities will enable us to detect, escalate and report potential activity of interest earlier and more effectively,” Salom said. “We remain focused on completing the remediation actions as outlined.
“There is still much to do, and this is a multiyear process, but we remain unwavering in our commitment to build the AML program we need, and we will continue to provide updates on a quarterly basis,” he said.
TD expects the work on its AML programs and related governance and control investments will cost roughly $500 million before tax in fiscal 2025, TD CFO Kelvin Tran said.
The AML issues at hand happened with former CEO Bharat Masrani at the helm. Masrani announced plans to step down after the issues were made public. Chun, originally set to replace Masrani in April, instead took the helm in February after his start date was moved up.
At the same time, TD slashed pay for 41 executives.
Compensation cuts reflected “the seriousness of the U.S. AML failures, the associated costs to the Bank, and the limitations imposed on the U.S. retail business,” the bank said at the time.
