TD Bank Is Now Facing A Painful Class Action Lawsuit

October 26, 2024

TD Bank is now facing a painful class action lawsuit over its AML failures by an investor for misleading its shareholders.

TD Bank is facing allegations that it misled investors regarding the seriousness of its anti-money laundering (AML) program failures and the potential repercussions, according to a lawsuit filed by an investor.

The proposed class action, initiated by James Tiessen in the U.S. District Court for the Southern District of New York, claims that TD executives made overly optimistic statements about the bank’s capacity to tackle AML issues while failing to disclose critical information, such as the likelihood of facing an asset cap that could hinder the bank’s future growth.

Tiessen contends that these misleading statements led shareholders to buy TD securities at inflated prices before the announcement of $3.09 billion in penalties and a $434 billion asset cap on October 10.

“The extent of the Company’s AML failures shocked both investors and analysts, who responded quickly to the news,” the lawsuit states.

“As a result, the price of TD’s common stock plummeted.”

The lawsuit names several high-ranking TD officials as defendants, including CEO Bharat Masrani, TD U.S. CEO Leo Salom, CFO Kelvin Vi Luan Tran, and TD Securities CEO Riaz Ahmed.

TD’s stock price dropped from $63.51 per share at the close on October 9 to $57.01 by October 11, a decline of more than 10.23% in just two days, according to Tiessen.

At the time of writing, TD shares were trading at $56.33, marking an 11.98% decrease since October 9.

This legal action follows TD Bank’s settlement with the Justice Department and the Office of the Comptroller of the Currency, which came after the bank pleaded guilty to failing to maintain a compliant AML program as required by the Bank Secrecy Act, along with other violations such as the inaccurate filing of Currency Transaction Reports.

“By facilitating services for criminals, TD Bank essentially became one itself,” stated Attorney General Merrick Garland when the settlement was announced.

He noted that TD Bank is now the largest U.S. bank in history to plead guilty to failures related to the Bank Secrecy Act, as well as the first U.S. bank to admit to conspiracy to commit money laundering.

“TD Bank prioritized profits over legal compliance—a choice that has now cost the bank billions in penalties.”

Garland also emphasized that the investigation is ongoing and that no individuals involved in TD Bank’s illegal actions would be exempt from scrutiny.

While the lawsuit does not specify the exact number of potential class members, Tiessen estimates it could be in the hundreds of thousands.

He is seeking a jury trial and is requesting damages along with pre- and post-judgment interest.

Tiessen’s attorney, Adam Apton from Levi & Korsinsky, and a representative for TD Bank did not respond immediately to requests for comment.

This is a developing story.

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Also Read: TD Bank Execs Behind Illegal Activities May Now Face Prison Time

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