Reports have indicated that the Canadian bank Oronto Dominion (known as TD Bank) allocated approximately $2.6 billion to cover the fines that are expected to be paid due to the bank's failures in anti-money laundering controls, and thus the bank sold part of its stake in Charles Schwab to finance these fines.

The reports indicated that the Canadian bank had announced in April that it allocated about $450 million to pay some fines, and therefore, the total fines are now estimated to be around $3 billion, due to the bank's failure to comply with U.S. regulations.

In a press release after the markets closed the day before yesterday, Wednesday, TD Bank announced that it expects to finalize a resolution for this issue by the end of the year, and that its ownership in Charles Schwab will decrease to 10.1% from 12.3% after selling about 40.5 million shares in the company.

Additionally, the bank's CEO, Bharat Masrani, confirmed in the statement that TD Bank acknowledges the seriousness of the deficiencies in the U.S. anti-money laundering program, and that they are currently working to meet the required commitments and responsibilities.

Last year, TD Bank's deal to acquire First Horizon for $13.4 billion collapsed, as the Canadian bank stated that it was unclear whether regulators would approve the deal, and shortly thereafter, TD Bank acknowledged that it received inquiries from the U.S. Department of Justice, in addition to financial regulatory authorities and the Treasury Department.

The main inquiries focused on the bank's failure to detect allegations of money laundering and other financial crimes at several U.S. branches, where employees dealing with customers received bribes to facilitate the transfer of funds.

So far, federal prosecutors in New Jersey have filed at least four lawsuits against the bank alleging serious misconduct by branch employees.

The bank stated that it dismissed about twelve front-line workers due to violations of conduct rules. TD Bank also replaced about 10 of its senior leaders in compliance and legal roles following the money laundering allegations.

In trading, Charles Schwab's stock fell by 2.65%, or by $1.71, with the stock currently trading near levels of $62.86 per share during pre-market trading ahead of the U.S. stock market opening.