How much are your AML controls worth?

Always an interesting question to ask given that appropriate anti-money laundering controls are requirement to hold and retain a banking license, or any other business license to operate in a regulated sector.

This week the answer is $13.4bn or perhaps $200m depending on whether you measure opportunity or cost.

This week TD Bank pulled out of a $13.4bn acquisition of First Horizon. Preventing the Canadian bank from becoming the sixth largest lender in the US and costing the TD $200m in a cash payment to First Horizon as a penalty to not complete the deal.

In response to the news, First Horizon came off even worse with shares plunging to a new low and a market capitalisation falling to less than $6bn.

The deal was ultimately scuppered following multiple delays following the Office of the Comptroller of the Currency and the Federal Reserve raising concerns over TD Bank’s handling of unusual transactions and its timeliness in reporting suspicious activity to them.

Other than a recent small value OFAC fine in 2021 ($115k) , TD has brushed more with regulators on themes relating to investor and consumer protection.

Either US regulators were being protective of their domestic market or perhaps there is yet more to unravel on this story