What happens when workplace accountability and ethics are ignored and employees dismiss suspected illegal activity with a carefree email ending in “LOL”? TD Bank, one of Canada’s largest financial institutions, learned the hard way after being hit this month with an historic $3 billion in penalties for enabling criminals to launder more than $670 million over several years.
The whopping penalties against TD Bank, which stemmed from a U.S. Justice Department investigation into violations of the Bank Secrecy Act, marks the largest ever fine imposed for violating anti-money-laundering laws. From 2018 to 2024, the bank failed to monitor 92% of its total transaction volume — about $18.3 trillion. Criminals took full advantage, laundering money through TD accounts. “There is nothing wrong with a bank that tries to make its services convenient for its honest customers,” Attorney General Merrick Garland was quoted in The Hill. “There is something terribly wrong with a bank that knowingly makes its services convenient for criminals.”
One of the most troubling aspects of this case was TD Bank’s internal "LOL" culture. Employees were aware of the suspicious activities and even laughed about them. According to The New York Times, one employee emailed a colleague saying, “You guys really need to shut this down LOL,” but no action was taken. In another instance, an employee asked, "How is this not money laundering?" The rejoinder? "It 100 percent is."
A customer known to the bank as “Dave” on multiple occasions deposited more than $1 million in cash in a single day and moved it out the same day using checks and wire transfers. The customer also bribed employees with $57,000 worth of gift cards. No significant action was taken until law enforcement intervened.
When businesses lack clear standards and fail to hold employees accountable, they open the door to unethical and unlawful behavior. In this case, a culture of unethical behavior grew to proportions that spiraled out of control — with devastating consequences on the bank’s bottom line, reputation and international customers.
TD Bank is the second-largest bank in Canada and operates more than 1,100 branches in the U.S. With $434 billion in assets, it ranks as the 10th-largest bank in the United States. High-level executives were made aware of the anti-money-laundering issues but didn’t take decisive action to address them.
The consequences of TD Bank’s failures are not limited to financial penalties. The bank will be under external monitoring for three years and on probation for five years. TD Bank CEO Bharat Masrani stated that the bank is cooperating fully and has already implemented changes, including hiring new anti-money-laundering specialists. "We know what the issues are, we are fixing them," Masrani told NPR.
Aside from the fine, the bank faces severe reputational damage. Its failure to act allowed money tied to drug trafficking, human trafficking, and terrorist financing to move through its accounts. As Deputy Treasury Secretary Wally Adeyemo told NPR, "TD Bank’s chronic failures provided fertile ground for illicit activity to penetrate our financial system."
The TD Bank scandal is a high-stakes lesson: Businesses that choose to overlook or ignore unethical behavior will eventually pay the price. Creating a culture of accountability is not just a best practice — it’s essential to long-term survival. As Garland told NPR, "By making its services convenient for criminals, [TD Bank] became one."
They’re surely not saying “LOL” anymore.
Amanda Nurse is the editorial and operations coordinator at Alphy.
Reflect AI by Alphy is an AI communication compliance solution that detects and flags language that is harmful, unlawful, and unethical in digital communication. Alphy was founded to reduce the risk of litigation from harmful and discriminatory communication while helping employees communicate more effectively. By flagging problematic language and behaviors in communications, Reflect AI enables companies to address issues early, preventing them from escalating into larger, more costly problems.
Contact us for a demo at sales@alphyco.com.
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