National Bank analyst Gabriel Dechaine said in a note that the worst-case scenario of the multiple U.S. investigations TD faces needs reassessing after the Wall Street Journal reported the link on Thursday.
"Criminals constantly seek to use banks to launder money. Regrettably, our U.S. program did not effectively thwart these activities. This is unacceptable, and we must and we will do better," said spokeswoman Elizabeth Goldenshtein in a statement. "We believe investors need to put greater weight on worst-case scenarios for the stock," he said in a note.
The link to drug trafficking comes the same week TD announced it had taken an initial provision of US$450 million in connection to the ongoing U.S. regulatory inquiry into its anti-money laundering compliance program.