Toronto-Dominion Bank is set to pay more than $20 million as part of a deal with US authorities to resolve an investigation into fraudulent trading methods used by a former employee to manipulate the US Treasury market.
Canada’s second-largest bank has entered into a three-year deferred prosecution agreement, the U.S. Department of Justice said Monday in a filing with New Jersey federal court.
The agreement will end the criminal and civil investigation, which, according to the filing, involved “the placement of hundreds of fraudulent orders amounting to tens of billions of dollars of false bid and demand in the secondary market for U.S. Treasury securities” by former trader Jeyakumar Nadaraja. .
It comes as the Canadian lender is close to potentially pleading guilty to criminal charges that its U.S. retail bank failed to curb money laundering linked to Chinese crime groups and illicit fentanyl sales, the Wall Street Journal reported last week.
The bank will pay a US criminal fine of $12.5 million to resolve civil investigations conducted by the US Securities and Exchange Commission and the Financial Industry Regulatory Authority. This comes in addition to a US criminal penalty of approximately $9.5 million related to the agreement. The bank also agreed to pay US$4.7 million in compensation to the victims and US$1.4 million in forfeitures.
