TD Bank to pay $20 million US to resolve ‘spoofing’ investigation
Toronto-Dominion Bank is set to pay more than $20 million US as part of a deal with American authorities to resolve an investigation into a former employee’s fraud trading tactics to manipulate the U.S. Treasuries market.
Canada’s second-largest bank entered into a three-year deferred prosecution agreement, the U.S. Department of Justice said on Monday in a filing with the New Jersey federal court.
The agreement will end the criminal and civil probe, which, according to the filing, involved “placing hundreds of fraudulent spoof orders amounting to tens of billions of dollars of false supply and demand in the secondary market for U.S. Treasuries” by former trader Jeyakumar Nadarajah.
This comes at a time when the Canadian lender is close to a possible guilty plea to criminal charges that its U.S. retail bank failed to curb money laundering tied to Chinese crime groups and illicit fentanyl sales, the Wall Street Journal reported last week.
The bank will pay a $12.5 million US criminal penalty to resolve civil investigations by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority. This comes on top of an approximately $9.5 million US criminal penalty related to the agreement. The bank has also agreed to pay $4.7 million US in victim compensation and $1.4 million US in forfeiture.
