Toronto-Dominion Bank (NYSE:TD) shares were off as much as 4% on Friday, as allegations surfaced from several current and former employees of widespread pressure to meet sales quotas at any cost — including potentially lying to and defrauding customers.
Written by StockNews.com
The news stirred up memories of the recent Wells Fargo & Co (NYSE:WFC) scandal, which rocked the financial institution, led to millions in fines, and did untold damage to its reputation.
Now TD seemingly faces a similar crisis of confidence of its own. The CBC ran a report earlier this week on the potential wrongdoings, which apparently touched off a firestorm of employees reaching out to share their own stories. From CBC:
Hundreds of current and former TD Bank Group employees wrote to Go Public describing a pressure cooker environment they say is “poisoned,” “stress inducing,” “insane” and has “zero focus on ethics.”
Some employees admitted they broke the law, claiming they were desperate to earn points towards sales goals they have to reach every three months or risk being fired. CBC has agreed to conceal their identities because their confessions could have legal ramifications.
For its part, TD claims all of its employees follow a certain code of ethics but employees tell a different story of unreasonable quotas that inevitably lead to them breaking those ethics, and in many cases, federal law.
Investors are taking a “sell first and ask questions later” approach to the news, with TD Bank shares were trading at $50.10 per share on Friday morning, down $1.67 (-3.23%). Year-to-date, TD has gained 2.36%, versus a 6.19% rise in the benchmark S&P 500 index during the same period.
TD currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #2 of 44 stocks in the Foreign Banks category.
