Reeling from a money laundering scandal and record-keeping fines, TD Bank has named an internal candidate Raymond Chun as its new CEO as it battles to change its culture.
Many expected a change in TD management after numerous issues with regulators over recent months.
Earlier in the year, TD was the subject of a US Department of Justice probe investigating how Chinese criminal groups were using the bank to launder profits from fentanyl sales. It emerged that TD employees, along with those at other banks involved in the laundering, were bribed with US$57,000 in financial incentives over the course of five years.
In anticipation of regulatory fines, TD set US$2.6 billion aside – a figure partially offset by the sale of 40,500,000 shares of common stock from its stake in The Charles Schwab Corporation. In August, these preparations resulted in the bank’s first loss in more than 20 years.
At the time, CEO Bharat Masrani assured that ”We recognise the seriousness of our US AML
program deficiencies and the work required to meet our obligations and responsibilities is of paramount importance to me, our senior leaders, and our boards. Our remediation program is well underway.”
In August, TD was fined US$30 million by the SEC and US$75 million by the CFTC over recordkeeping violations. It was fined a further US$4 million by the CFTC over failures to effectively monitor communications. Along with 25 other firms caught up in the commissions’ penalties sweep, the bank agreed to pay the fines.
READ MORE: Firms hit with CFTC, SEC recordkeeping and communication failure fines
In a 21 August update, TD stated that it expected to see a global resolution, including monetary and non-monetary penalties, to be finalised before the end of the year. As part of its improvement efforts, and amid questions of its internal culture and excessive bureaucracy, Masrani stated that TD had “[added] globally recognised leaders and talent from across the industry, including experts from regulatory agencies, law enforcement and government” to its AML team. “The bank is also making important investments in data and technology, training, and process design,” he added.
Chun, currently group head of Canadian personal banking, will join the board of directors and become chief operating officer from 1 November. Reporting to Masrani, he will be responsible for all TD’s business lines. At the annual meeting of shareholders on 10 April, he will be appointed as CEO.
Masrani will step down on 10 April 2025, and remain at the bank in an advisory capacity until 31 October 2025.
On his departure from the firm, Masrani stated that “the anti-money laundering challenges we face took place on my watch as CEO and I take full responsibility” and stated that he would continue to direct remediation processes before stepping down, after almost 40 years with the bank, and following a decade’s tenure as CEO.
Chun, who has spent more than three decades with TD, began his career in the management training programme and rising the ranks by way of president of TD direct investing, president and CEO of TD insurance and group head of wealth management and insurance.
Alan MacGibbon, chair of the board of directors, affirmed that “[Raymond’s] proven ability to drive change, deliver outcomes, and build strong, high-performing teams will serve him well as he guides TD into the future.”
Sona Meta, currently executive vice president for real estate secured lending and everyday banking, saving and investing, will take on Chun’s role as head of Canadian personal banking. Further reshuffling in the senior executive team has seen Paul Clark appointed senior executive vice president for wealth management, and Tim Wiggan named as group head of wholesale banking and president and CEO of TD Securities.
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