In December of last year, TD Bank published its fourth quarter and full‑year 2025 financial results, showing it had absorbed the financial impact of a notable US anti‑money‑laundering (AML) settlement while still delivering solid underlying performance.
A rise in adjusted net income for the quarter and the full year confirmed that the bank had provisioned for the settlement and related compliance costs and remained on track with its strategic priorities.
The year‑end results highlighted the approximately $3 bn resolution of criminal and regulatory investigations into the bank’s US Bank Secrecy Act and AML compliance failures. Under the terms of the Global Resolution, TD and certain US subsidiaries entered consent orders with the Office of the Comptroller of the Currency, the Federal Reserve Board and the Financial Crimes Enforcement Network and pleaded guilty to charges including conspiring to fail to maintain an adequate AML program and failing to file accurate currency transaction reports.
The settlement included the payment of penalties and a requirement to fix the bank’s US AML systems, to be overseen by an independent compliance monitor and supported by ongoing regulatory supervision. In addition, the bank’s US operations face an asset cap, limiting total assets at the US banking subsidiaries until regulators are satisfied that the corrective steps are complete.
The scale of the penalties and the enforcement terms place TD’s AML failures among the most severe enforcement actions in US banking history. FinCEN’s record $1.3 bn penalty alone for Bank Secrecy Act violations marked the largest ever assessed by the agency.
Compliance breakdowns at TD involved long‑standing deficiencies in key AML controls. US authorities found that the bank’s AML systems were not adequately designed to monitor transactions, conduct thorough customer due diligence or produce suspicious activity reports quickly enough, despite rapid growth in client activity and new payment products. These control failures meant that a significant number of transactions went unmonitored for extended periods, creating systemic risk and regulatory exposure.
In response to the enforcement actions, TD accelerated changes to its leadership. A new chief executive took the helm in early 2025, leadership roles in financial crime risk management were reshaped and the bank publicly acknowledged the need to strengthen the culture of compliance across the enterprise. These changes reflected a broader governance reset intended to rebuild trust with regulators, shareholders and customers.
The bank’s December 2025 results and subsequent disclosures show a dual focus: absorbing the financial cost of enforcement and undertaking a multi‑year remediation program that remains the bank’s top operational priority. TD has been transparent that corrections will continue through 2026 and into 2027, with ongoing investment in governance, controls and technology to bring its AML programs up to regulatory standards.
This theme of compliance breakdowns, risk oversight and crisis governance was reflected in Arm Holdings’ success at the 2025 Corporate Governance Awards, where it was named winner of the ‘best compliance and ethics program’.
In the Winners Report that followed the awards, Arm Holdings was praised by the award judges for the evolution, transformation and ongoing improvements noticeable in the initiative and was highlighted for its use of innovative technology, data and AI.
The judges also highlighted weekly engagement between the chief compliance officer and each business line’s COO at Arm Holdings, which ‘establishes a foundation of trust and an informed approach to compliance’.
As TD transitions from settlement to implementation, the case stands as a stark reminder of how serious compliance failures can evolve into material financial and reputational risks. The interplay between risk oversight, compliance culture and crisis governance will likely remain under scrutiny by investors and regulators as the bank works through its corrective obligations.