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Published November 26, 2024
Investors were shocked when banking giant Toronto-Dominion Bank recently announced a settlement with the U.S. government over failures in the bank’s anti-money laundering systems. The settlement terms not only required Toronto-Dominion to pay a massive fine, but also to restructure its books. Stunned investors dumped their shares, causing Toronto-Dominion’s share price to plummet 10% in just two days. Now angry shareholders have filed a class action lawsuit against the bank, adding to the Company’s legal woes.
According to that lawsuit, throughout much of 2024, Toronto-Dominion’s executives issued remarks reassuring investors about the Company’s ability to comply with U.S. anti-money laundering laws. Even after the bank became the target of a U.S. government probe, executives downplayed the likelihood of a major fine and told investors that the company would continue to do business as usual. In reality, those executives knew the U.S. Government was likely to hit Toronto-Dominion with massive fines and force the bank to restructure.
Investors learned the truth in October when Toronto-Dominion issued a press release announcing its settlement with the U.S. government. The bank paid over three billion dollars in fines, and the government capped Toronto-Dominion’s total assets, forcing the bank to restructure its balance sheet and reduce its total assets by 10%.
When investors discovered this settlement, they quickly offloaded their shares. Some of those upset investors are now signing up for the class action lawsuit in hopes of recovering their lost investment.