From bankingdive.com Published Oct. 24, 2024:
TD Bank misled investors about the severity of failures of its anti-money laundering program and about the consequences it could face as a result, according to an investor lawsuit.
The proposed class action, filed by James Tiessen in the U.S. District Court for the Southern District of New York, alleges that TD executives made “overwhelmingly positive statements to investors” about the bank’s ability to address AML issues while at the same time misleading investors by, in part, not indicating that an asset cap – or any measure that would undermine the bank’s growth for the foreseeable future – was in the cards.
Executives’ positive statements absent this information caused shareholders to purchase TD’s securities at artificially inflated prices, Tiessen alleged, before its $3.09 billion in penalties and $434 billion asset cap were announced on Oct. 10.
“The unveiling of the scope of the Company’s AML failures surprised investors and analysts alike as they reacted immediately to the revelations,” according to the lawsuit. “The price of TD’s common stock declined dramatically.”
The lawsuit names TD CEO Bharat Masrani, TD U.S. CEO Leo Salom, TD CFO Kelvin Vi Luan Tran and TD Securities CEO Riaz Ahmed as defendants.