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The reason behind the termination of Toronto-Dominion Bank’s acquisition of First Horizon Corp. last week has finally been revealed. The Wall Street Journal reported that TD could not obtain the necessary approval from US banking regulators due to past concerns regarding its handling of suspicious customer transactions. 

Last Thursday, TD released a statement, calling off the $13.4 billion deal to purchase First Horizon. Shares of the Memphis-based regional bank crashed but clawed back some losses in the last few sessions. 

A person familiar with the bank deal said the termination was due to mounting uncertainty about whether the Office of the Comptroller of the Currency and the Federal Reserve would approve it because of TD’s past anti-money-laundering practices. 

Concerns surfaced among federal regulators regarding TD’s handling of unusual transactions in recent years, as well as the speed at which Canada’s second-biggest bank reported those transactions to US authorities, the person said. 

Despite TD’s commitment to improving its anti-money laundering policies, it couldn’t sway regulators’ approval for the completion of the deal, the source continued. 

“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,” a spokeswoman said in an emailed statement. 

TD’s anti-money-laundering procedure problem is yet another issue for the lender. It paid $1.2 billion earlier this year to settle a lawsuit accusing it of aiding disgraced financier Allen Stanford’s Ponzi scheme more than a decade ago. Stanford was convicted in 2012 and was sentenced to 110 years in prison.