Toronto-Dominion Bank will pay more than $20 million US as part of a deal with American authorities to resolve an investigation into fraudulent trading tactics its former employees used to manipulate the US Treasury market.
Canada's second-largest bank signed a three-year deferred prosecution agreement, the U.S. Department of Justice said Monday in a filing to New Jersey federal court.
The agreement would end criminal and civil investigations, which according to the filing, involved “the placement of hundreds of fraudulent orders worth tens of billions of dollars of fraudulent supply and demand in the U.S. Treasury secondary market” by former trader Jeyakumar Nadarajah.
This comes as the Canadian lender is on the verge of pleading guilty to criminal charges that the US retail bank failed to curb money laundering linked to Chinese crime groups and the sale of illegal fentanyl, 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 is in addition to the $9.5 million American criminal penalty associated with the agreement. The bank also agreed to pay victims compensation of $4.7 million and a forfeiture penalty of $1.4 million.