TD Banks Offloads 10% Stake In Charles Schwab Amid Landmark Fine

TD Bank is selling its entire stake in US financial services firm Charles Schwab as part of a strategic review undertaken following a landmark US fine for money laundering.

The Canadian bank is set to sell its 10.1% stake in Charles Schwab for approximately $14.6 billion. It will offload 165.4 million of its 184.7 million shares at $79.25 each, totaling around $13.1 billion, with Schwab acquiring the remaining shares from TD for $1.5 billion.

The decision follows TD Bank’s record $3 billion penalty for violating US anti-money laundering laws, the largest fine ever under the legislation.

US regulators also imposed a $434 billion asset cap on TD Bank, restricting its growth in the US, a key market it has targeted for over a decade. The bank faces additional penalties for enabling drug cartels and other criminals to move hundreds of millions in illicit funds.

Prosecutors accused TD Bank of running weak anti-money laundering controls for nearly a decade and failed to act even when staff warned about blatant abuses, such as a customer making daily cash deposits of $1 million.

TD Bank made history as the largest US lender to plead guilty to Bank Secrecy Act violations and the first to plead guilty to conspiracy to commit money laundering.

Following the offloading of its Charles Schwab shares, TD Bank’s new CEO, Raymund Chun, said the bank plans to allocate C$8 billion ($5.6 billion) of the proceeds for share buybacks, with the remaining proceeds invested in performance and organic growth.

Chun assumed the role of group president and CEO on February 1, succeeding Bharat Masrani, who retired. He previously served as chief operating officer.