Elizabeth Warren: TD Bank Execs Should Have Been Prosecuted

Last month, the Justice Department settled an anti-money laundering probe into TD Bank.

But according to U.S. Sen. Elizabeth Warren, D-Mass., the $3 billion the government received from the Canadian lender was not enough.

As The Wall Street Journal (WSJ) reported last week, Warren said the Department of Justice (DOJ) erred by choosing not to prosecute TD’s leading executives.

“These charging decisions represent absurd legal gymnastics by the DOJ that ultimately have allowed the bank and its top executives to avoid full responsibility for their actions. This is not an acceptable outcome,” Warren wrote in a letter to the department.

According to the WSJ report, Warren is not alone in her criticism. Better Markets, an independent transparency group, praised regulators and prosecutors for going after TD Bank, but said that failing to prosecute management was “wrong and dumb.” 

“Handcuffing minnows while letting the whales go free is not justice and will not deter those who have the power at banks to ensure that they are following the law. Until those individuals are held personally accountable, illegal and even criminal behavior will continue,” the group said in a statement last month.

The DOJ began investigating TD’s anti-money laundering (AML) practices after discovering that a criminal Chinese operation had laundered hundreds of millions of dollars from illegal drug sales through the bank’s branches in New York and New Jersey, while also bribing TD workers.

The bank has said it has since taken measures to improve its AML practices. The case has also led to the departure of President and CEO Bharat Masrani, set to retire in 2025.

“The anti-money-laundering challenges we face took place on my watch as CEO and I take full responsibility,” Masrani said in a statement announcing his retirement. “In the coming months, I will continue to advance and direct the critical remediation program required to meet our obligations and responsibilities and strengthen our risk and control foundation.”

As PYMNTS wrote earlier this year, TD’s troubles came amid increasing oversight into AML practices in the financial sector.

“And where these firms, banks and FinTechs among them, are deemed to come up short, there’s a (literal) price to pay,” that report said. “In the meantime, the very rules governing AML and fraud-fighting efforts may change, as a commentary period is ongoing as regulators seek input on the use of advanced technologies to sharpen fraud defenses at financial institutions.”