Wealth advisors formerly at TD face legal action for departing to Raymond James
In a series of developments, Canadian banking giant TD Bank is facing a lawsuit and multiple anti-money laundering (AML) inquiries in the United States.
The bank has declined to comment on a lawsuit filed against former employee Gregg Desmarais due to the ongoing legal case. Desmarais, along with another former employee Brett Bartkiewicz, is alleged to have violated their contracts by enticing clients with millions of dollars in assets to defect to Raymond James. TD has sued both Desmarais and Bartkiewicz over the alleged breach of contract.
Michael Roche, Desmarais' lawyer, stated that his client denies TD's allegations. Roche also mentioned that TD's lawsuit against Desmarais has nothing to do with TD's AML issues.
Desmarais' FINRA profile indicates a voluntary resignation due to an internal review based on suspected AML policy violations by the representative. However, Lisa Hodgins, TD spokesperson, stated that the internal review mentioned on Desmarais' FINRA profile is not related to TD's broader AML investigation.
TD is facing three other AML inquiries in the U.S. The Canadian banking giant is under investigation after Justice Department agents revealed a money laundering operation that stemmed from a scheme under which criminals moved at least $653 million of fentanyl proceeds through branches in New York and New Jersey. The probe brought to FINRA's attention did not end before Desmarais left, and has no connection with the non-solicitation lawsuit.
The collapse of the First Horizon deal is rumored to be catalyzed by TD's AML woes. TD plans to set aside $450 million to cover the penalty cost from one of the three U.S. regulators.
In a separate development, Desmarais and Bartkiewicz joined Raymond James unit Crescent Point Private Wealth. A temporary restraining order has been placed on Desmarais, preventing him from contacting his former firm's clients. According to a signed agreement, Desmarais was not allowed to "contact, call upon or solicit" any client to lure away their business from the bank for at least 12 months following the end of his employment with TD.
TD lost at least 10 accounts worth more than $22 million within one week of the former employees' departures, according to WealthManagement.com. The head of the AML investigation of TD Bank related to the 2021 counterfeit money incident has not been publicly disclosed.
As of now, no information has been provided about purchasing licensing rights for the story. The investigation into TD's AML practices continues, and updates will be provided as more information becomes available.
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