Sen. Warren Slams TD Bank Settlement, Calls for Accountability of Executives in Money-Laundering Scandal

The Justice Department’s $3 billion settlement with TD Bank may have closed one chapter in a decade-long money-laundering saga, but Sen. Elizabeth Warren is far from satisfied with how the story ends. In a fiery letter to Attorney General Merrick Garland, Warren pulled no punches, calling the DOJ’s handling of the case a form of “absurd legal gymnastics” that shields TD’s top executives from facing the music. Her frustration underscores a growing concern in Washington: are these settlements really justice, or just another line item in the cost of doing business?

Warren’s letter, sent to Garland and Deputy Attorney General Lisa Monaco, doesn’t mince words. She accuses the DOJ of avoiding the most serious charges, allowing TD to sidestep a potentially devastating “death penalty” for banks—losing its operating license in the U.S. This, Warren argues, amounts to letting TD and its leaders off the hook for what prosecutors have called a “criminally deficient” anti-money-laundering program that allowed a staggering $670 million of dirty money to flow through the bank, some of it tied to New York-based Chinese laundering rings and even fentanyl trafficking.

No Consequences for the Top Brass?

For the risk and compliance community, this situation hits close to home. Warren’s frustration mirrors a sentiment that’s all too familiar: fines don’t always fix the problem, especially if they don’t hold decision-makers accountable. Sure, $3 billion is a massive settlement, but as Warren sees it, without meaningful consequences for the executives steering the ship, there’s little incentive for real change. In her letter, she challenges the DOJ’s decision to stop at TD’s holding company in the U.S., leaving the bank’s Toronto-based leadership untouched.

“This isn’t an acceptable outcome,” Warren declared, driving home her point that justice for corporate misconduct shouldn’t be selective. So far, only two lower-level TD employees have been criminally charged, accused of taking bribes to help launderers dodge scrutiny. But Warren isn’t buying the idea that accountability stops at the employee level—she’s calling on the DOJ to go higher and bring charges against those at the top, the people she believes presided over a “criminal slush fund.”

Warren’s take is a cautionary tale for the industry. Compliance and integrity need to be built from the top down. The DOJ has long stated that they’re serious about holding individuals accountable, with Monaco herself recently reinforcing that message. But Warren’s letter lays bare the gap between this promise and the reality of corporate settlements, where leadership can sometimes seem to float above the consequences that fall on the rank and file.

The DOJ’s decision to sidestep the “money laundering” charge also points to a murky balancing act in banking regulation. By structuring the settlement this way, the DOJ avoided the drastic “death penalty” scenario, but Warren sees it as sacrificing real justice for convenience. The transparency advocacy group Better Markets didn’t hold back on their critique either, calling the DOJ’s approach “wrong and dumb” and warning that “handcuffing minnows while letting the whales go free” isn’t just ineffective—it risks setting a dangerous precedent.

A Settlement That Raises More Questions Than Answers

For the compliance and risk management community, the TD Bank settlement underscores a crucial question: if fines alone aren’t enough to change corporate behavior, what will? Warren argues that, until executives are held personally responsible, banks will keep treating fines as just another line in the budget, an inevitable price of doing business.

Better Markets echoed that sentiment, pointing out that without personal accountability, the people with the power to prevent these issues will continue to avoid taking real responsibility. “Illegal and even criminal behavior will continue,” the group warned, as long as the industry keeps letting those at the top off the hook.

While the DOJ’s investigation into individual TD employees is still ongoing, Warren’s criticism shines a light on the limitations of high-stakes settlements. As the dust settles, the hope is that cases like TD’s will inspire a cultural shift toward genuine accountability and transparency in banking. Compliance professionals have long been the frontline defenders against financial crime, but Warren’s letter suggests that it’s time for those higher up to shoulder that burden too.

At the end of the day, the TD Bank case serves as a stark reminder for the industry: genuine compliance means more than just writing checks—it’s about integrity at every level, especially the top. For now, TD’s record-breaking fine is a headline, but the deeper narrative Warren is pushing for—a shift toward executive accountability—might just be the story that needs to stick.

Calls for Accountability

The call for accountability in financial institutions has intensified globally, with lawmakers and regulators urging firms to make leadership responsible for maintaining integrity and compliance. Senator Elizabeth Warren's recent call for accountability within TD Bank echoes this sentiment, pointing out that while the institution faced hefty penalties for its anti-money laundering failures, its top executives sidestepped personal consequences. Warren’s message to the DOJ emphasized a systemic concern: without individual accountability at the highest levels, penalties risk becoming mere “costs of doing business.” Warren argued that unless leaders are personally responsible, banks may view compliance measures as disposable under financial pressure.

In the UK, the Senior Managers and Certification Regime (SM&CR) offers a framework designed to prevent this very issue by holding senior managers and certified staff directly accountable for failures. Initiated after the 2008 banking crisis, the SM&CR mandates that leaders in banks, insurers, and other financial institutions demonstrate personal accountability in areas of governance, risk management, and consumer protection. One of the regime’s central goals is to encourage a culture of integrity and responsibility by clarifying roles and establishing explicit accountability at senior levels.

Unlike in the U.S., where cases like TD Bank's still grapple with holding individuals accountable, the UK’s SM&CR compels senior leaders to maintain stringent standards of conduct and enables regulators to impose penalties on individual managers for failing to meet these standards. This focus on accountability has contributed to more proactive risk management and a clearer understanding of responsibilities among senior managers in the UK financial sector. For example, since its introduction, senior managers in UK firms have shown a heightened focus on compliance and reporting, as observed in the FCA’s 2019 review, which found that the SM&CR had significantly strengthened the tone from the top and increased a culture of transparency and accountability.

Warren’s critique of the DOJ's handling of TD Bank could serve as a prompt for the U.S. to adopt similar accountability measures to ensure executive-level diligence. She highlighted that avoiding direct charges for money laundering helped TD escape the “banking death penalty,” or the potential revocation of its charter. This, Warren contended, should be addressed by prioritizing individual accountability, similar to what the SM&CR framework envisions in the UK. For compliance professionals, this signals a possible shift toward stronger personal accountability mechanisms in the U.S., especially given the regulatory appetite for reform following high-profile cases like TD Bank's.

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