Bharat Masrani, current CEO of TD, plans to step down in April.
TD Bank Faces AML Challenges and Leadership Changes
TD Bank, Canada's second-largest lender, is navigating significant challenges due to a major U.S. Department of Justice (DOJ) probe into anti-money laundering (AML) failures. The bank pleaded guilty to conspiracy, money laundering, and violating the Bank Secrecy Act related to systemic AML compliance failures, including poor suspicious activity report (SAR) filings and customer due diligence deficiencies.
The AML issues have prompted substantial organizational and strategic changes at TD Bank. Bharat Masrani, who has been at TD for 38 years and has spent about a decade as CEO, announced his retirement on April 10, 2022, and Raymond Chun will succeed him. Chun, who has deep retail banking experience, was chosen after a "lengthy and competitive process" that involved external candidates.
Chun has led various regions, product teams, and operations within TD, growing businesses across the company. He has also served as CEO of TD's insurance unit, giving him a broad view of a business and exposure to risk. After becoming CEO, Chun will serve as an adviser to the bank until October 31, 2025, according to TD.
The succession plan at TD Bank has been affected by these AML challenges, with new leadership both at the CEO level and board chair position aiming to stabilize the bank and improve its compliance posture. John MacIntyre will step in as board chair effective September 1, 2025, reflecting governance reshuffling likely influenced by the AML scandal.
The AML deficiencies are being addressed with significant remediation work. TD has set aside about $3.57 billion for estimated penalties and fines related to the anti-money laundering issues. The bank's U.S. growth plans have slowed dramatically due to these challenges.
Meanwhile, Stephen Joyce has been named interim head of financial crime risk management for TD’s Canadian and international operations, signaling a focus on strengthening financial crime controls beyond the U.S. business. Riaz Ahmed, head of wholesale banking and CEO of TD Securities, will retire at the end of January, with Tim Wiggan, a longtime TD Securities executive, set to succeed him.
During a conference call, analysts questioned Chun's experience with thorny issues and his ability to oversee the resolution of the bank's anti-money laundering woes. Masrani has taken full responsibility for the AML challenges that took place during his tenure as CEO. The bank's leadership is committed to restoring investor confidence and improving its compliance posture.
Despite these challenges, TD Bank continues to face regulatory scrutiny with independent monitors expected to oversee remediation efforts. The bank is under continuing scrutiny with reputational and operational consequences from the AML probe while restructuring leadership and strategic assets as part of its recovery and compliance reinforcement. Masrni will continue to be involved with the bank post-April 10, 2022, in any capacity where he can add value.
- The leadership changes at TD Bank, including the appointment of Raymond Chun as CEO, are part of a comprehensive strategy to address financial challenges, particularly those related to anti-money laundering (AML) failures.
- John MacIntyre, who will take on the board chair position in September 2025, is expected to play a crucial role in stabilizing the bank and improving its compliance posture, specifically addressing the AML deficiencies that TD has been facing.
