Q: It seems like everyone is positive on TD's future prospects. Yet no one mentions the potential monetary fines that could be levied against TD associated with money laundering. Why is that? Everyone appears to be very complacent about the probe over anti-money laundering. If the fines were substantial, could TD shares not take a hit? Your comments would be appreciated.
5i Research Answer:
TD has faced several fines in the past, between 2013 and 2020, some as high as ~$122M. TD stock has increased around 225% in this same timeframe. While the fines have an impact on its bottom line, they are largely not enough to have a material impact, particularly one that is long-lasting. TD is a $153B company and so even nine-figure fines are unlikely to have a material impact on its share price. Part of these fines could also be partially priced in by investors.