TD Bank Faces $3 Billion Fine Amid Money Laundering Scandal for NYSE:TD by DEXWireNews – TradingView

TD Bank (NYSE: T.D), Canada’s second-largest bank, has been hit hard with a $3 billion fine following its guilty plea in a high-profile money laundering case involving drug cartels and other criminal networks. This large fine is a result of TD’s failure to monitor more than $18.3 trillion in customer activity, which resulted in more than $670 million being funneled through money laundering-related accounts. As part of the settlement, TD Bank will face severe growth restrictions and the implementation of a strict regulatory program for its U.S. operations.

The whole story
The Department of Justice (DOJ) and federal financial regulators have highlighted TD Bank’s failure to address money laundering (AML) concerns. According to Attorney General Merrick Garland, the bank’s profit-driven mentality allowed it to turn a blind eye to the illegal activities of drug traffickers, which led to TD Bank becoming complicit in these crimes. In addition to the financial penalty, TD’s U.S. subsidiaries are prohibited from growing their total assets above $434 billion, similar to the Federal Reserve’s sanctions against Wells Fargo in 2018.

This settlement is expected to have a serious impact on TD Bank’s business prospects. The DOJ’s $1.8 billion portion of the fine is one of the largest fines in U.S. banking history. In addition, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has imposed a record $1.3 billion fine and TD Bank will monitor compliance for four years.

TD leadership, including CEO Bharat Masrani, has taken responsibility for the bank’s failure and vowed to make necessary changes to its AML program. While this is a big step, it may not be enough to regain stakeholder trust in the short term. The controversy surrounding TD Bank’s role in criminal activities, including narcotics trafficking and terrorist financing, poses a significant challenge to the institution’s reputation.

Technical Analysis
TD Bank’s stock was under significant pressure as the scandal unfolded. As of the last trading session (NYSE: T.D) is down more than 6%, signaling a selloff among investors wary of the bank’s future prospects. The stock’s Relative Strength Index (RSI) has fallen to a weak 33, indicating it is entering oversold territory. This RSI level reflects a stock that could continue to fall if negative sentiment continues.

On the daily price chart, TD Bank (NYSE: T.D) shows a classic gap-down pattern, a strong bearish reversal signal. This pattern, combined with overwhelming negative fundamentals, indicates that the stock could see further declines in the near term.

Nevertheless, TD Bank (NYSE: T.D) is trading above both the 100-day and 200-day moving averages (MAs), indicating that there is still some long-term technical support. If the stock can stabilize at these levels, it may be able to recoup some losses once the immediate fallout from the scandal subsides. However, undershooting these key moving averages could point to deeper problems ahead.

What’s next for TD Bank?
TD Bank’s near-term future remains uncertain as it grapples with the fallout from its debt plea. The fines will not only hinder financial performance but also limit growth, especially in the highly competitive US market. The negative publicity surrounding the scandal and regulatory restrictions could erode investor confidence, leading to increased share price volatility.

With TD Bank’s commitment to correcting its AML program and the support of a strong leadership team, the bank may be able to weather the storm. Long-term investors will be closely watching how the bank implements its corrective actions and regulatory oversight in the coming years.

In the short term T.D is in for a bumpy ride. With technical indicators pointing to more downside risk, traders should keep an eye on the 100- and 200-day moving averages as potential support levels. If these break, the stock could be in for a steeper decline.