CASE ALLEGATIONS: The Toronto-Dominion Bank (TD Bank) offers its services in the U.S. under the “TD Bank” and “America’s Most Convenient Bank” brands.

The TD Bank class action lawsuit claims that, during the Class Period, the defendants made false and/or misleading statements and/or failed to disclose critical facts regarding the true state of TD Bank’s anti-money laundering (AML) program. Specifically, the lawsuit alleges that TD Bank concealed or downplayed the severity of failures within its AML program and did not disclose that the imposition of an asset cap or other punitive measures could potentially hinder TD Bank’s growth in the foreseeable future.

The lawsuit further alleges that on May 2, 2024, The Wall Street Journal reported a U.S. Department of Justice investigation into TD Bank’s AML controls. The investigation focused on how Chinese crime groups and drug traffickers used the bank to launder money from fentanyl sales in the U.S., with agents discovering an operation that laundered hundreds of millions of dollars through TD Bank. Following this revelation, the complaint states that TD Bank’s stock price dropped by nearly 6%.

Additionally, the lawsuit claims that on October 10, 2024, TD Bank disclosed the resolution of U.S. investigations, which included a $3.09 billion penalty, an asset cap limiting the bank’s U.S. subsidiaries to $434 billion in assets (the amount as of September 30, 2024), and more stringent approval processes for the bank’s future product, service, and market launches. The U.S. Department of Justice also highlighted TD Bank’s failures, noting that it became the largest bank in U.S. history to plead guilty to violations of the Bank Secrecy Act and the first U.S. bank to plead guilty to conspiracy to commit money laundering. As a result of this news, TD Bank’s stock price fell by more than 10%, according to the lawsuit.