TD Bank is now under federal investigation after the bank received inquires related to its money laundering policies, Bloomberg Law reports.
The bank made the disclosure in its third-quarter financial results Thursday, saying it may face penalties as a result of the probe.
“The bank is cooperating with such authorities and is pursuing efforts to enhance its Bank Secrecy Act/anti-money-laundering compliance program,” the Toronto-based company said.
“While the ultimate outcomes of these inquiries and investigations are unknown at this time, the bank anticipates monetary and/or non-monetary penalties to be imposed.”
TD CEO Bharat Masrani on Thursday declined to comment on an analyst’s question during the post-earnings conference call on a provision for possible fines, says Reuters.
“What I can say…we are pursuing efforts to enhance our U.S. AML compliance program,” he told analysts.
The lender scrapped its planned $13.4 billion acquisition of U.S. regional lender First Horizon earlier this year, a move that was cheered by investors amid the U.S. regional banking crisis.
TD said it paid a termination fee of C$306 million in May and separately, incurred a loss of C$199 million from its investment in First Horizon.
In June, TD CEO Bharat Masrani told shareholders the bank would resolve issues with regulators that led to the collapse of the acquisition.
“We believe the potential fallout from this issue could result in higher capital costs and higher investment spending in order to address the issue,” National Bank analyst Gabriel Dechaine said in a note, referring to the outcome of the U.S. investigations.
Some analysts said TD could afford to pay any eventual fine given its strong capital position, reports Reuters.
Also Read: TD Ameritrade Bartlett Warehouse Burns After Investigation Announcements
TD Ameritrade and TD Bank
Corporate Director of Communications for Charles Schwab, Margaret Farrell, reached out to FrankNez to provide readers with some history on TD Ameritrade and TD Bank to avoid confusion.
Below is her summary of the events leading to the Charles Schwab acquisition.
- Despite sharing the TD name, TD Ameritrade and TD Bank have always been separate companies.
- For some historical context – In 2006, then-Ameritrade acquired TD Waterhouse, then owned by TD Bank. In turn, Ameritrade became TD Ameritrade and TD Bank received the right to own up to 45 percent of TD Ameritrade stock, but both continued to operate independently.
- When Charles Schwab acquired TD Ameritrade, TD Bank and its affiliates received a percentage of Schwab common stock, the details of which are outlined in the Oct. 2020 press release announcing the deal’s close: https://www.businesswire.com/news/home/20201006005590/en/Schwab-Completes-Acquisition-of-TD-Ameritrade
Thank you Margaret for that brief and valuable summary.
Other Market News Today
Wedbush has now upgraded AMC Entertainment (NYSE:AMC) from ‘underperform’ to ‘neutral’ with analysts currently looking at a 17.98% upside, Nasdaq reports.
On Thursday, AMC stock fell more than -26% while APE fell nearly -18% despite the fundamental upgrade.
Investors are sharing a mix of emotions on Twitter, urging CEO Adam Aron to release a public statement on the stock’s performance, see below.
Total shares owned by institutions increased in the last three months by 10.96% to 154,378K shares, according to Fintel data.
However, “the put/call ratio of AMC is 0.49, indicating a bearish outlook,” says Nasdaq.
Exact definitions vary between brokerages, but an underperform rating is worse, in general, than “neutral” but better than “sell” or “strong sell.”
Neutral is assigned to a stock that is expected to deliver results that match the broader market.
Underperform is a stock that will likely perform slightly below par: seeing greater losses in a down market and below-average gains in an up market, per Investopedia.
AMC’s reverse stock split has left shareholders with 10x less shares with the company stock trading 10x higher.
Up next is the conversion of APE shares into AMC common stock which will occur on Friday August 25.
The litigation settlement will then take place on Monday, August 28.
AMC Entertainment has now secured the ability to raise billions of dollars from retail investors despite plunging share prices.
Investors have once again saved the company, but at what cost?
AMC’s upgrade from underperform to neutral is a positive outlook, but unless the news translates over to the company’s stock price, investor confidence is at a standstill.
Also Read: TD Ameritrade Reports AMC Market Cap at $7.7 Billion
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About The Author
When will FINRA and the SEC be under investigation? Everything else is buuuuuuulllllllshit.
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