03:09 PM EDT, 10/04/2024 (MT Newswires) -- One litigation analyst says Toronto-Dominion Bank's ( MLWIQXX ) final settlement related to U.S. compliance lapses could be as high as US$4 billion, Bloomberg is reporting Friday.

Bloomberg News reported in August that TD said it anticipated having to pay a total of more than $3 billion in penalties related to U.S. compliance lapses amid allegations that it failed to catch money laundering and financial crimes at branches south of the border.

"The $3 billion in provisions that TD has taken over the last couple of quarters, that sets a floor for what the potential monetary penalty is going to be, but we don't really know what the final number is going to be," Elliott Stein, a senior litigation analyst of financials at Bloomberg Intelligence, said in an interview with BNN Bloomberg on Friday.

Stein said there is not a precedent for anti-money laundering penalties in amounts this high "for any bank at all," and anti-money laundering violations typically result in penalties in the "hundreds of millions of dollars."

"So this TD case, based on the provisions that they've taken, really is going to set a new bar," he said.

Stein noted that in a 2012 anti-money laundering case, HSBC took about $1.5 billion in provisions in two steps ahead of a final settlement with a $1.9 billion penalty. "So based on those numbers, we do think that TD could wind up having to pay more than the $3 billion that it has provision for," he said.

Based on provisions TD Bank has taken so far, Stein said it appears to be a "more egregious case."

(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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