Toronto-Dominion Bank has reached a tentative deal with the Ontario Securities Commission regarding alleged fee overpayments by clients for 14 years. The OSC will decide on November 13 whether to approve the deal involving TD’s self-reported violations.
The proposed settlement involves investment advisor TD Waterhouse Canada Inc., TD Waterhouse Private Investment Counsel Inc., and mutual funds seller TD Investment Services Inc.
According to the regulator, the settlement has been reached on a no-contest basis, meaning the bank will not have to admit to any wrongdoing.
TD Bank employs about 79,000 workers and has more than 22 million clients globally.
Earlier this year, TD detected four different matters that led to client overpayment of fees and reported them to the OSC.
According to the regulator, some TD customers ended up paying too much because of failures within the company’s supervisory systems and internal controls. TD also allegedly failed to advise some clients that they qualified for lower MERs (management expense ratios). Expense ratio refers to how much mutual fund managers charge you.
The OSC wrote in its Statement of Allegations:
“The failures in the TD Entities’ systems of controls and supervision associated with the Control and Supervision Inadequacies were contrary to the public interest.”
The company added that it planned to compensate the overcharged clients and would place tighter controls and monitoring to make sure the mistakes did not recur.
TD has not publicly disclosed how much clients were overcharged.
In a statement, the company said:
“TD Wealth self-reported the issues to the Ontario Securities Commission and other regulators and has already formulated a plan to, and is currently in the processes of, notifying and compensating clients and former clients impacted by the overcharges.”
The Toronto-Dominion Bank is Canada’s second largest bank and the sixth largest branch network in North America. It was created in 1955 following the merger of the Dominion Bank and the Bank of Toronto.
