TD Bank has appointed Guidepost Solutions as a compliance monitor following a $3 billion penalty imposed by U.S. authorities for lapses in anti-money laundering (AML) compliance. The compliance monitor was mandated by the Department of Justice (DoJ) and the Financial Crimes Enforcement Network (FinCen) as part of the settlement agreement. TD Bank’s Chief Financial Officer emphasized that addressing AML issues and enhancing compliance frameworks is now the bank’s top priority.
The bank has spent $86 million in the first fiscal quarter of 2025 on AML remediation efforts and anticipates investing a total of $500 million by the end of fiscal 2025. U.S. CEO Leo Salom and newly appointed CEO Raymond Chun reaffirmed their commitment to strengthening and enhancing the bank’s U.S. AML compliance program. Guidepost Solutions, based in Chicago, brings a team of over 250 professionals, including former federal prosecutors and intelligence officers, to oversee the improvements.
The increased focus on AML compliance follows the imposition of more than $3 billion in penalties and a $434 billion cap on U.S. retail assets tied to TD’s AML shortcomings, which were revealed during an investigation into the fentanyl trade.
Td Bank appoints a compliance monitor
In response, TD is centralizing all investigative cases into a new case management system and developing machine-learning tools to better analyze customer data for potentially illicit activities.
“Building these capabilities will enable us to detect, escalate, and report potential activities of interest more effectively,” Salom said. “Completing the remediation actions as outlined is a multiyear process, but we remain committed to developing the AML program we need. We will provide updates on progress on a quarterly basis.”
TD has also reduced compensation for 41 executives to reflect 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 issues at hand occurred during the tenure of former CEO Bharat Masrani, who announced his resignation following the disclosure of the AML problems. Chun, initially set to succeed Masrani in April, assumed the role earlier in February. The bank aims to implement most management remediation actions by the end of 2025, with further actions planned for 2026.
TD Bank will continue to focus on fortifying its AML program while maintaining transparency with stakeholders by providing regular updates.
