Toronto Dominion bank fined £7m
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Toronto Dominion has been fined £7m for systems and controls failings in the bank’s second FSA fine in only two years.
It is the fourth largest fine levied by the FSA, and relates to failures around the pricing of sophisticated financial products.
The bank was previously fined £490,000 in 2007 when a trader attributed false values to his trading positions and created fictitious trades to hide significant losses on his book.
The latest systems failings forced the bank to make a negative adjustment of $96m Canadian dollars in July 2008.
The breaches relate to pricing issues that were uncovered on a proprietary trader’s books within Toronto Dominion’s Credit Products Group.
Amongst other failings the FSA found that Toronto Dominion failed to follow their established procedures in ensuring the trader’s books were independently verified, and did not have adequate controls in place which could have detected the pricing issues.
The FSA says that if it was not for the fact Toronto Dominion co-operated fully with its investigation, the fine would have been £10m.
FSA director of enforcement and financial crime Margaret Cole says: “This is one of our largest fines and it underlines the seriousness with which the FSA views repeat offences.
“When we uncover failings in a firm we expect them to put it right immediately and to take special care to ensure it does not happen again.
“Toronto Dominion clearly failed to apply proper controls in this area despite its previous sanction and repeat offenders need to know that they will face severe consequences.”
She adds: “It is important that firms trading in sophisticated and often illiquid financial products have robust controls in place, particularly in times of increased market volatility.
“Where a firm doesn’t do this the FSA will take action.”
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Readers' comments (5)
Incompetent Regulators Awards Team | 17 Dec 2009 10:22 am
FSA building up next year's bonus reserves I see!!!!
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KS | 17 Dec 2009 10:43 am
Where does all this money go?
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Julian Stevens | 17 Dec 2009 11:19 am
When is the FSA going to start dishing out fines for similar failings on a few British banks? I have in mind, of course, Barclays' systematic mass misselling of that Aviva Global Balanced Managed fund to thousands of customers for whom such a fund was patently unsuitable. Not only that, but Barclays has even had the gall to fob off and reject complaints as a matter of course.
The FSA would be down on any IFA practice or network like a hundred tons of hot bricks for such behaviour. But when it comes to their neighbours at Canary Wharf.......
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Alison Davies | 17 Dec 2009 11:29 am
Where does this fine money go? Could it not be used to offset the Keydata / NDF compensation payouts instead of increasing the levy to IFAs?
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michael white CEO Emailmortgages | 17 Dec 2009 11:32 am
Just a thought......does this mean another expert adviser to the FSA is about to be announced?
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