10:19 AM EDT, 05/03/2024 (MT Newswires) -- (Updates with additional details throughout. Corrects the day of report in the first paragraph and clarifies headline.)

The US Department of Justice investigation into Toronto-Dominion Bank's ( MLWIQXX ) internal controls is focused on how Chinese drug traffickers used the company to launder US fentanyl sales revenue, The Wall Street Journal reported Thursday.

The probe started after agents uncovered an operation in New York and New Jersey that laundered proceeds from illegal drug sales via TD and other banks, the report said, quoting court documents and unnamed sources familiar with the situation.

The WSJ said that TD disclosed a DOJ probe into its anti-money-laundering practices last year but that the focus on money laundering linked to illegal drug deals hasn't been previously reported.

TD said Tuesday that in addition to the DOJ investigation, it's also under scrutiny in three other anti-money-laundering probes in the US, the WSJ reported.

The WSJ quoted a TD spokeswoman as saying in a statement on Thursday that the company is cooperating with law-enforcement officials and boosting an anti-money-laundering project.

The TD spokeswoman said that criminals regularly try to use banks to launder money and that the bank's systems didn't effectively block these activities. "This is unacceptable, and we must and we will do better," the TD spokeswoman was quoted as saying.

Toronto-Dominion Bank ( MLWIQXX ) didn't immediately respond to a request for comment by MT Newswires.

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

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