To help finance fines from punishments related to its failure to prevent money laundering by Chinese crime syndicates pushing fentanyl into the United States, TD Bank has decided to sell a portion of its large stake in the broker-bank Charles Schwab. Your Survival Guy has been a critic of Charles Schwab and its own banking practices in the past. Connor Hart reports in The Wall Street Journal:
TD Bank has set aside $2.6 billion for fines it is likely to face from U.S. regulators because of weaknesses with its anti-money-laundering practices.
Canada’s second-largest bank by market capitalization said Wednesday the fiscal third-quarter provision reflects its current estimate of the total fines related to these matters.
The bank plans to offset part of the provision through the sale of 40.5 million shares of common stock in Charles Schwab, which would reduce TD’s ownership interest in the wealth-management company to about 10% from more than 12%.
The divestiture is worth $2.62 billion, based on Charles Schwab’s closing price of $64.57 on Wednesday. TD said it has no current intention to sell additional shares.
Action Line: Your Survival Guy prefers to separate bank accounts from portfolio accounts. Family-owned Fidelity Investments is not a bank. It’s a private, family-run business, which keeps the pressures of Wall Street earnings expectations at bay. You don’t want to do business with a company that has a fiduciary duty to shareholders in conflict with its fiduciary duty to you. When you want to talk to a fiduciary about your investment plan, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
