TD Bank hit with record $3 billion fine over drug cartel money laundering, source says

TD Bank will pay $3 billion to settle charges that it failed to properly monitor money laundering by drug cartels, a source with knowledge of the settlement told CNN.

TD Bank will pay $3 billion to settle charges that it failed to properly monitor money laundering by drug cartels, a source with knowledge of the settlement told CNN. The fine includes a $1.3 billion penalty that will be paid to the US Treasury Department’s Financial Crimes Enforcement Network, a record fine for a bank. The Wall Street Journal first reported the news. The Canadian bank will also be subject to four years of monitoring by FinCEN to observe the lender more closely and ensure it is following the agreement. TD Bank declined to comment on the fine, but the bank plans to hold a call with investors later on Thursday. The tough penalties from regulators on Thursday caught Wall Street off guard. TD Bank’s (TD) US-listed shares slumped 5% as investors brace for higher legal expenses and weaker growth. “We believe that the market was becoming increasingly comfortable with the thought that there would not be any growth restrictions placed on TD,” John Aiken, analyst at Jefferies, wrote in a note to clients on Thursday. “TD will need to find a new avenue for growth from its traditional reliance on US retail banking.”