TD shares plunge 5 per cent in wake of allegations

TORONTO Shares of Toronto-Dominion Bank fell more than five per cent Friday following allegations in a CBC News report that the bank engaged in high-pressure sales tactics and unethical practices.

TD said the environment described in the media report “is very much at odds with how we run our business.”

“We have a long history of providing great customer service and we do that by listening and responding to our colleagues and our customers. We’ll continue to do so,” said Bharat Masrani, CEO of TD Bank Group.

“We are in the trust business. Everything we do is about earning and sustaining the trust of those we serve. It’s an incredible honour and obligation — and a huge source of pride for all of us — to know that millions of people have chosen TD to help them achieve their financial goals.”

The bank also said, in a statement on its website, that it sets goals to manage its business, but that all employees are required to follow a code of conduct and act ethically.

Concern among TD investors that the company is having “a Wells Fargo moment” will be an “overhang that is unlikely to dissipate in the near term,” said John Aiken, an analyst at Barclays in Toronto.

In the report, TD employees said they felt pressured to meet high sales goals, and admitted to breaking the law with practices such as increasing lines of credit without telling customers.

Aiken said that while it is unlikely that there will be material repercussions from the report, there is little TD can do to disprove the allegations and questions will linger until a probe, which could take months, is complete.

Wells Fargo & Co. has been embroiled in a scandal involving abusive sales practices in its branch- es. The bank was slapped with a US$185-million fine by U.S. authorities in September for opening hundreds of thousands of retail bank accounts without client approval, The Associated Press reported.

The CBC report on Friday cited “hundreds of current and former TD Bank Group employees” who described a “poisoned” and “stressinducing” work environment.

Some of these employees told CBC News that they broke the law with some of their tactics in an effort to reach quarterly sales goals, or risk termination.