By Dominic Chopping
Norway's $1.9 trillion sovereign wealth fund said late Wednesday that it has placed Toronto-Dominion Bank under observation for a period of four years over financial crime concerns.
The wealth fund is managed by Norway's central bank, but decisions to exclude or place companies on observation are made based on recommendations from an ethics council appointed by the ministry of finance.
In a statement Wednesday, the ethics council said it recommended placing TD under observation due to an unacceptable risk that the company is contributing to, or is itself responsible for, serious financial crime.
"The council's investigations have found that TD may be linked to multiple cases of financial crime the past 10-15 years," it said.
TD reached a settlement with U.S. authorities last year in which it pleaded guilty to multiple charges for failings in its anti-money-laundering controls and agreed to pay $3.09 billion in fines and accept limits on its growth in the U.S. It was also fined in 2013 in relation to non-compliance with anti-money laundering legislation in the U.S.
The council said that TD has made sweeping changes to its management in recent times and has adopted an ambitious plan for improvements, which reduces the risk of similar incidents reoccurring.
"Nevertheless, the council considers that the extent to which these plans will be realized within the indicated time period remains uncertain, especially in light of the significant amount of work that remains to be done to create a good compliance culture within the company."
At the end of 2024, the most recent date that information is available, the fund held a 1.05% ownership stake in TD.
The company didn't immediately respond to a request for comment.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
06-12-25 0538ET
