- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2024-05-28T19:45:00
The chief risk officer at TD Bank Group said “procedural weaknesses” in the institution’s U.S. anti-money laundering (AML) program allowed bad actors to exploit its network.
Ajai Bambawale acknowledged the bank’s AML program needed shoring up, in response to an analyst’s question included in a transcript of the bank’s May 23 conference call regarding its second-quarter earnings.
“[W]e always endeavor to be best in class in every risk area, but yes, from time to time, we find we’ve fallen behind in a particular area, and we’re out there owning the issue that we fell behind in our program and our program did not pick up things it should have picked up,” Bambawale said.
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Law enforcement officials stumbled on TD Bank’s role in money laundering while investigating a Mexican drug cartel. They found that the bank’s corporate culture considered compliance, particularly BSA/AML compliance, a low priority. As they dug deeper, authorities discovered that multiple money laundering schemes had infiltrated the bank’s network.
TD Bank will pay nearly $3.1 billion in penalties to four U.S. regulators to settle charges that it “chose profits over compliance” when it allowed three money laundering networks to filter more than $670 million in dirty money through the company.
Broker-dealer TD Securities failed to prevent a trader from placing and then withdrawing thousands of false trades over the course of a year in part because its compliance department failed to follow up on red flags generated by the illegal trades, three regulators said.
When the DOJ released its revised Evaluation of Corporate Compliance Programs, it turned some heads. Tucked into a section on risk assessments was a strongly worded series of questions that appeared to shoulder compliance teams with the responsibility for ensuring the safe use of AI tools by their firms.
The Department of Justice’s Evaluation of Corporate Compliance Programs has made the importance of artificial intelligence governance frameworks clear, but it didn’t say what role compliance should play. Here’s the answer.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an alert to financial institutions about their obligations to report deepfakes, warning artificial intelligence has given bad actors additional tools in their arsenal.
