Schwab's stock dips as TD Bank reduces its stake by $3.4 billion

By Steve Gelsi

TD Bank sells 40.5 million shares of Schwab's stock, which is down on greater dilution

Charles Schwab Corp.'s stock moved lower Thursday after its shareholder TD Bank Group said it sold 40.5 million shares of the brokerage and money-management firm to raise money for an expected anti-money laundering penalty from regulators.

Charles Schwab's stock (SCHW) dropped 1.6% after TD Bank (TD) said it generated $3.4 billion in sales of Schwab stock in a move that reduced its stake in the company to 10.1% from 12.3%.

TD said it won't sell any additional shares of Schwab for at least 45 days.

TD Bank got the stock as part of Schwab's $26 billion acquisition of TD Ameritrade, which closed in 2020.

For its part, TD Bank said it's planning to resolve a civil and criminal probe into the U.S. Bank Secrecy Act's money-laundering provisions by the U.S. Financial Crimes Enforcement Network and the Justice Department.

The bank took a further provision of $2.6 billion in its third fiscal quarter as it pursues a resolution, which it expects to finalize by the end of 2024.

TD said it's strengthened its U.S. anti-money laundering program by hiring "globally recognized leaders and talent from across the industry, including experts from regulatory agencies, law enforcement and government."

TD Bank's stock was down 4.4% in morning trades.

Prior to Thursday's trading, Schwab's stock was down 6.2% in 2024, compared to a 17.8% rise by the S&P 500 SPX.

-Steve Gelsi

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08-22-24 0938ET

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