TD Fined £7 Million In the UK
By: Ainsley Brown
Verify Those Books
The Toronto Dominion Bank (TD), one of Canada’s leading financial instructions has been fined £7 million by the Financial Services Authority (FSA).
The FSA, charged with policing financial institutions in the UK, has imposed the fourth highest fine in its history on TD for repeatedly failing “to follow established procedures in ensuring the trader’s books were independently verified.” According to the FSA TD failed to ensure that price valuations by one of its traders in its London based Credit Products Group of its Investment Banking division were accurate.
There is no word yet on whether the trader in question was, is or will be subject to investigation. According to the Times the FSA declined to comment on whether these pricing issues were the result of a systematic scheme to falsify information or was just a mistake.
The large fine, while not the largest – that distinction belongs to Royal Dutch Shell in 2004 with a whopping £17 million for overstating its oil and natural gas reserves – was significant being TD’s second violation. The FSA fined TD back in 2007 £490,000 when fixed income trader Simon Brgnall created fictitious trades to hide significant losses. The £17 million fine was imposed to send a message to TD and other financial institutions that repeated violations would not be tolerated by the FSA.
The good news for TD, like there could be good news in this situation, is that due to its full co-operation with the FSA the fine was reduced from £10 million to the current £7 million. Despite the reduction in the fine, I wonder how financial markets on both sides of the Atlantic will respond to this news?
