However, even if the stock has "priced in" the bad news doesn't this reflect very badly on management, governance, compliance etc of this institiution.
I would far sooner put money in other banks like RY. To date TD is by far the worst performing of the big banks (-15%) and I daresay this might be just the beginning of this mess.
Why not cut bate, sell it as it is a spoiled equity for the forseeable future and buy a well managed FI?
Sheldon
By 'priced in' we generally reference 'everything' including investors unhappiness with management. When sentiment is low and everyone hates a stock, it can at times bounce very well. We do not of course know if this is the case here, but the question sort of answers itself. If investors 'blame' management, the stock gets cheaper as they sell, setting up a positive return if sentiment does change. TD made an announcement after the close addressing how it plans to deal with the problem. Certainly some of the issues relate to single employees, but of course the bank is the overseer of all employees so this is not really an excuse. In the US, similar cases have seen banks get hit with a non-material fine, and then simply carry on. With a smaller competitive field in Canada, it makes for more of a media frenzy here when a bank is found at fault.