Toronto-Dominion Bank TD agreed to pay approximately $3.09 billion in fines to U.S. authorities after pleading guilty on Thursday to money laundering-related charges in an ongoing case brought by federal prosecutors, who accused the Canadian bank of essentially making it easy for criminals and cartels to move money around the world for nearly a decade.

"By making its services convenient for criminals, TD Bank became one," said Attorney General Merrick B. Garland on Thursday. "Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first U.S. bank in history to plead guilty to conspiracy to commit money laundering."  

The penalties are the largest ever imposed by U.S. authorities on a bank for money laundering violations.

Read Also: TD Bank To Face $3B Penalty, Growth Limits In US Settlement Over Anti-Money Laundering Failures

Referring to court documents from between January 2014 and October 2023, the Justice Department's Office of Public Affairs stated, "TD Bank had long-term, pervasive, and systemic deficiencies in its U.S. AML policies, procedures and controls but failed to take appropriate remedial action."

Employees Involved?

Federal prosecutors also said some of the bank's employees had enabled the money laundering the bank was slow to detect and address.

"TD Bank's persistent prioritization of growth over controls allowed its employees to break the law and facilitate the laundering of hundreds of millions of dollars," stated Michael J. Hsu, the acting Comptroller of the Currency, reported the New York Times.

Rare But Stern Response: Asset Cap

The Office of the Comptroller imposed an asset cap that will prevent TD Bank from growing beyond its current $370 billion in assets and curbing its growth in a key market. This marks the first such restriction on a major bank since Wells Fargo in 2018.  

"The imposition of an asset cap will ensure that the bank focuses on building proper controls commensurate with its risk profile," Hsu said.

The TD Bank Group, Canada's second-largest bank, has over 1,000 branches in the U.S. 

"The bank is also pleading guilty to criminal charges brought by law enforcement authorities," noted the Federal Reserve in a press release. "The Board’s action will help ensure that TD operates in compliance with all U.S. laws and regulations."

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TD Price action: TD Bank stock closed Thursday 5.29% lower at $59.44 per share at market close on Thursday.

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