Treasury Archives

TD Bank now gets caught with illegal market manipulation and has agreed to pay over $20 million under a deal with the SEC.

Investors are calling it ‘pay to play’.

The U.S. broker-dealer unit of Toronto Dominion Bank (TD Securities USA) has agreed to pay more than $20 million to resolve allegations of manipulating the U.S. Treasuries market.

This settlement comes as part of an agreement with U.S. authorities, concluding a lengthy investigation, per Reuters.

In a court filing on Monday, TD Securities admitted to engaging in spoofing practices within the U.S. Treasuries market as part of a deal with the U.S. Justice Department.

The firm also settled related civil charges with the Securities and Exchange Commission (SEC).

Additionally, the bank faced charges for not properly supervising its former head of the U.S. Treasuries trading desk.

From April 2018 to May 2019, a former employee manipulated the U.S. Treasury cash securities market by placing orders he had no intention of executing, a tactic known as “spoofing.”

This practice aims to create a misleading impression of market demand.

U.S. regulators have taken a strong stance against spoofing, which is designed to distort market activity.

However, the criminal bank has now been let go off what investors deem as ‘easily’.

Under the terms of TD’s agreement, the Justice Department will refrain from prosecuting the firm as long as it adheres to the three-year agreement and implements significant compliance improvements.

The DOJ decided not to appoint a third-party monitor for compliance, based on the company’s efforts to address the issues.

As part of the settlement, TD Securities will pay a $12.5 million criminal penalty related to civil investigations by the SEC and the Financial Industry Regulatory Authority (FINRA).

This amount is in addition to an approximately $9.5 million criminal penalty outlined in the agreement.

The bank will also compensate victims with $4.7 million and forfeit $1.4 million.

This settlement comes at a time when the Canadian bank is reportedly on the verge of pleading guilty to separate charges concerning its U.S. retail bank’s alleged failure to prevent money laundering linked to Chinese crime groups and illegal fentanyl sales, as reported by the Wall Street Journal last week.

For more US Bank News and updates like this, join the newsletter or opt-in for push notifications.

Also Read: TD Bank Customers Now Say They Cannot Access Their Money

Other Regulation News Today

Market News Today - TD Bank Now Gets Caught With Illegal Market Manipulation. — Market News Today – TD Bank Now Gets Caught With Illegal Market Manipulation.

Illegal short sellers will now face life sentence in prison after the National Assembly approved the amendment.

The National Assembly has approved an amendment to the Capital Markets Act aimed at enhancing penalties for illegal short selling, per Business Korea.

Under this new law, individuals who profit illegally from short selling exceeding 5 billion won (around $3.79 million) could face severe penalties, including prison sentences of up to life imprisonment.

On September 27, financial authorities confirmed that the amendment, designed to overhaul the short selling system, passed the National Assembly on September 26.

The legislation mandates that institutional investors must establish an electronic short selling system, and both institutional and corporate investors are now required to implement internal control standards.

Approximately 101 companies, representing 92% of domestic short selling transactions, must adopt these electronic systems.

These firms will also be obligated to report stock balances and over-the-counter (OTC) transactions to the exchange, increasing their compliance responsibilities under the newly instituted central monitoring system.

Securities firms will need to annually verify the internal controls and electronic systems of institutional and corporate investors, following a checklist, and report the findings to the Financial Supervisory Service (FSS).

Non-compliance could result in fines of up to 100 million won.

To standardize short selling conditions for individual and institutional investors, the repayment period for loan transactions related to short selling will also be constrained.

Violations of this rule will incur fines of up to 100 million won, with loan terms extendable in 90-day increments for a maximum of 12 months.

Additionally, the amendment seeks to deter repeated illegal short selling by increasing administrative penalties.

Fines for unfair trading and illegal short selling will rise from three to five times the illicit profit to four to six times.

Offenders earning over 5 billion won from illegal short selling may now face the same enhanced prison terms as those engaging in unfair trading.

Administrative sanctions will be broadened, allowing regulators to restrict trading of financial investment products for up to five years and limit the appointment or reappointment of executives at listed companies.

This aims to tackle the high recidivism rate among financial criminals by effectively barring them from the market for a specified duration.

To combat the concealment of illegal profits, accounts suspected of being involved in unfair trading or illegal short selling can be frozen for up to six months, with a possible extension of an additional six months.

The amended law will take effect on March 31 of next year, providing time for the implementation of the electronic short selling system, which is expected to be operational by then.

However, restrictions on trading financial products and executive appointments will begin six months after the law is enacted, following public consultations.

Upcoming revisions to the enforcement decree will lower the short selling disclosure threshold from 0.5% to 0.01% of outstanding shares and reduce the collateral ratio for individual short sellers to match that of institutional investors, with completion expected by next month.

A representative from the Financial Services Commission (FSC) noted that limiting the loan repayment period for short selling transactions to 12 months, along with finalizing amendments to the Financial Investment Business Regulations, will lower the collateral ratio for individual short sellers from 120% to 105%, leveling the playing field.

The FSC official added, “With the electronic short selling system set to launch in March, the improvements to the short selling framework will be fully realized.

Our goal is to restore investor confidence and enhance the competitiveness of the South Korean stock market.”

For more Market News and updates like this, join the newsletter or opt-in for push notifications.

Also Read: Glitch Now Traps Hedge Funds In A Massive Short Squeeze

Market News Published Daily 📰

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Be sure to share this article with your community.

Also, thank you to all of our site sponsors.

This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

Our readers can now donate $3 per month to support independent journalism.

For daily news and updates on your favorite stories, opt-in for push notifications.

Follow Frank Nez on X (Twitter), Instagram, or Facebook.

More Market News 📰

Recommended For You ✨

The Treasury now recovers a whopping $1.3bn in unpaid taxes from high net worth individuals who sought to dodge paying.

The IRS announced on Friday that it has collected $1.3 billion from wealthy tax evaders since last fall, attributing this success to increased enforcement efforts funded by President Joe Biden’s climate, health care, and tax legislation enacted in 2022.

Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel visited an IRS campus in Austin, Texas, to highlight this achievement amid warnings from Republicans about potential budget cuts for the agency if they regain control of the White House and Congress.

In her speech, Yellen pointed out that in 2019, the wealthiest 1% of Americans were responsible for over 20% of unpaid taxes, leaving a heavier burden on average taxpayers.

“To address this, we’ve directed IRS funding toward substantial investments to tackle tax evasion,” she stated.

In 2023 and 2024, the IRS initiated several programs targeting high-income individuals who have not paid their tax obligations.

The focus is on taxpayers with incomes exceeding $1 million and tax debts over $250,000.

According to IRS officials, nearly 80% of the 1,600 millionaires identified for delinquent taxes have since made payments, resulting in over $1.1 billion recovered.

Additionally, in the first six months of a new initiative launched in February 2024, the IRS collected $172 million from 21,000 wealthy individuals who had not filed tax returns since 2017.

Republicans have advocated for cuts to IRS funding, with Donald Trump’s presidential campaign promising to significantly reduce federal agency spending.

Trump’s campaign also criticized Democratic nominee Kamala Harris for her role in hiring 87,000 new IRS agents, a claim that stems from a Treasury proposal to expand the IRS workforce over the next decade if additional funding is secured.

With around 50,000 IRS employees expected to retire in the next five years, the agency is seeking to bolster its staff, reports ABC News.

The National Taxpayer Advocate, an independent IRS oversight body, reported that the IRS currently employs about 681 armed agents.

This year, the IRS also launched a program called Direct File, allowing individuals with simple W-2 forms to directly calculate and submit their tax returns to the agency.

In April, the IRS noted that participants in this program claimed over $90 million in refunds.

While 12 states participated in the Direct File program for the 2024 tax season, more states, including Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine, are set to join for the 2025 tax season.

For more news and updates like this, join the newsletter or opt-in for push notifications.

Also Read: The US Treasury Direct is Now Freezing Customer Accounts

Other Economy News Today

Market News Today - The Treasury Now Recovers A Whopping $1.3bn In Unpaid Taxes. — Market News Today – The Treasury Now Recovers A Whopping $1.3bn In Unpaid Taxes.

TD Bank now says plans to open branches has slowed as it tackles its anti-money laundering issues and sets aside money for penalties.

TD Bank is currently under civil and criminal investigations regarding its U.S. anti-money laundering (AML) program.

These probes are linked to allegations that traffickers laundered over $653 million associated with fentanyl through the bank, with claims that bank employees were bribed by criminals.

In response to these AML issues, TD’s expenses have increased significantly, reports Banking Dive.

The bank has allocated approximately $3.57 billion for potential penalties and fines related to these matters and anticipates reaching a “global resolution” by the end of the year.

To address the situation, TD has invested in enhancing its risk management and control systems, with last quarter’s expenses totaling $11 billion.

Executives expect AML-related costs to peak in early 2025.

Last year, TD announced plans to open 150 new branches in the U.S. by 2027, following the unsuccessful attempt to acquire First Horizon for $13.4 billion.

However, analysts are concerned that the ongoing AML investigations could hinder the expansion of the bank’s U.S. operations.

Leo Salom, TD’s U.S. CEO, acknowledged the uncertainties surrounding the branch opening plans during a May meeting with analysts, stating that more clarity would be provided when possible.

While TD’s CEO Bharat Masrani did not share specific updates on the branch plans, he emphasized that resolving the AML issues remains the bank’s top priority.

He noted that the U.S. division, which serves around 10 million customers, has been performing well.

TD representatives did not immediately respond to inquiries about the revised branch opening numbers or any potential employee terminations or compensation changes.

Regarding lessons learned from the AML situation, Masrani highlighted the importance of establishing clearer accountabilities across different risk areas and ensuring timely communication of critical information to the appropriate staff within the organization.

He acknowledged that, in a bank of TD’s size, there can be challenges in maintaining clear accountability.

For more US Bank News like this, join the newsletter or opt-in for push notifications.

Also Read: A Massive US Bank is Now Closing Credit Cards