Class-Action Lawsuit Targets TD Bank After Failure of First Horizon Deal
BY PYMNTS | MAY 23, 2023
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A class-action lawsuit has reportedly been filed against TD Bank following its failed attempt to acquire First Horizon Bank.
The Arbitrage Fund, which is a First Horizon shareholder, is suing TD Bank, alleging that it made misleading statements and omissions about the planned purchase, Seeking Alpha reported Tuesday (May 23).
The Arbitrage Fund and TD Bank did not immediately reply to PYMNTS’ request for comment.
The class-action lawsuit is on behalf of certain First Horizon shareholders and “concerns statements made by, or on behalf of, TD Bank to the investing public regarding TD Bank’s ability to timely close a business combination with First Horizon — a combination that was ultimately abandoned,” the complaint said, according to the report.
In a statement provided to Seeking Alpha, TD Bank said: “TD’s public disclosures are accurate. The lawsuit is without merit and TD will vigorously defend it.”
TD Bank and First Horizon Bank called off their planned $13.4 billion merger on May 4, saying in a joint statement that the decision came after TD told First Horizon that TD didn’t have a timetable for regulatory approvals.
“Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement,” the banks said in the statement.
The planned merger — which would have created America’s sixth-largest bank — was announced about 14 months earlier, in February 2022.
Four days after the deal was called off, on May 8, it was reported that the merger was ended by regulators’ concerns about TD Bank’s anti-money laundering (AML) practices.
The concerns of the Office of the Comptroller of the Currency (OCC) and the Federal Reserve centered on TD Bank’s handling of unusual transactions and its timeliness in reporting suspicious activity to them, The Wall Street Journal (WSJ) reported May 8, citing unnamed sources.
A TD Bank spokesperson told the WSJ: “TD works diligently to prevent criminals from using the bank for illegal activity, to strengthen its risk management programs on an ongoing basis, and to protect the interests of our customers, the bank and the financial system.”
