TD Bank’s takeover of First Horizon reportedly scuppered by AML concerns

TD Bank’s US$13.4 billion takeover of US regional bank First Horizon collapsed over regulators’ concerns about the Canadian lender’s anti-money laundering (AML) practices, according to the Wall Street Journal (WSJ).

On May 4 2023, TD Bank informed First Horizon that it did not have a timetable for regulatory approvals to be obtained for reasons unrelated to the US bank. Because there was uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement.

Reasons for termination

The deal announced in February 2022 has stalled several times and TD Bank has not expanded on why it finally declared it was unable to obtain a timetable for regulatory approvals.

The WSJ however says it has spoken with sources who say that the Office of the Comptroller of the Currency (OCC) and the Federal Reserve raised concerns about TD Bank’s management of unusual transactions and its timeliness in suspicious activity reporting to them.

The regulators’ reluctance to provide TD Bank with a regulatory timetable was primarily motivated by their concerns about the Canadian bank’s AML arrangements according to the WSJ.

Previous BSA violations

In 2013, the OCC assessed a US$37.5 million penalty against a TD Bank branch in the US state of Delaware for violations of the US’ bank secrecy act (BSA).

The OCC found that the bank failed to file suspicious activity reports on activity in accounts belonging to law firm Rothstein Rosenfeldt Adler, through which Scott Rothstein ran a US$1.2 billion Ponzi scheme.


Categories: Trade Based Financial crimes News

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