Toronto-Dominion Bank is set to pay more than $20 million US as part of a deal with American authorities to resolve an investigation into a former employee's fraud trading tactics to manipulate the U.S. Treasuries market. (Andrew Lahodynskyj/The Canadian Press)
Toronto-Dominion Bank has agreed to pay over $28 million in a settlement with U.S. authorities over an investigation into fraudulent trading practices by a former employee. The case involves manipulation of the U.S. Treasuries market.
The U.S. Department of Justice announced the settlement, which includes a three-year deferred prosecution agreement, in a New Jersey federal court filing. This agreement concludes both criminal and civil investigations into the case, which centered on ex-trader Jeyakumar Nadarajah's use of "spoof orders" to create false supply and demand in the secondary market for U.S. Treasuries, involving transactions worth tens of billions of dollars.
This development comes as the bank faces a possible guilty plea in a separate criminal case involving its U.S. retail division, which is under scrutiny for failing to prevent money laundering linked to Chinese crime groups and illicit fentanyl sales, according to a recent Wall Street Journal report.
As part of the settlement, TD Bank will pay a $12.5 million criminal penalty to resolve civil investigations led by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority. The bank will also pay an additional $9.5 million in criminal penalties, $4.7 million in compensation to victims, and $1.4 million in forfeiture.
