Q: In regards to TD - the issue of accountablity arises. The AML lapses were well known inside the company - judging by the "LOL" internal emails. The CEO has profusely apologized - has he received any kind of consequences? Just generally at what point do the board of directors ever suffer consequnces for these type events - can you cite any examples? Just frustrating that branch managers or tellers might be held to account but not highly paid upper management for their lack of supervision.
Regards
Regards
5i Research Answer:
In other situations, we have seen board members simply resign rather than face consequences. Board members do have unlimited personal liability, but we cannot quote a historical Canadian source where Members have lost personal assets. When they resign, that is usually the end of the story. The CEO is leaving, and we fully expect more heads to roll here, and it is quite possible there will be some US prosecution of some individuals. Now that the penalties are known, TD essentially has a PR problem, and we would expect a lot more fall-out in terms of employee turnover and accountability. This is what we 'expect' but TD has to come through on this to get sentiment improving again.