TD Bank, First Horizon Sued by Investors Over Failed Acquisition

TD Bank, First Horizon Corp., and their corporate officers were hit with a proposed securities class action alleging they made misleading statements about the likelihood of regulatory approval of TD Bank’s acquisition of FHN.

The companies and their officers made public statements, beginning with a press conference on Feb. 28, 2022, assuring that the deal would go through by the mid-2023 at the latest, according to the complaint filed Thursday in the US District Court for the District of New Jersey.

The defendants, however, failed to disclose that TD Bank had “materially deficient anti-money laundering” policies and procedures, lead plaintiff Andrew Amicarelli alleges.

These risks caused regulators at the Office of the Comptroller of the Currency and the Federal Reserve to balk at the transaction, the complaint alleges.

TD Bank and FHN announced on May 4, 2023 “that they had mutually agreed to terminate the transaction because TD Bank ‘does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon,’ and ‘there is uncertainty as to when and if these regulatory approvals can be obtained,’” Amicarelli alleges.

“TD Bank and FHN, however, failed to disclose that TD Bank’s materially deficient AML policies and procedures had derailed regulatory approval of the Transaction,” the complaint alleges.

The news of the termination caused FHN’s stock price fell by more than 33%, to close at $10.06 per share on May 4, 2023, according to the complaint.

Amicarelli seeks to represent a class of people who acquired FHN securities between Feb. 28, 2022, and May 3, 2023, estimated to include “hundreds or thousands of members.”

The complaint alleges violations of the Securities Exchange Act of 1934 and seeks damages, attorneys’ fees, and costs.

A spokesperson for TD Bank said the company’s “public disclosures are accurate.” The suit “is without merit and TD will vigorously defend it,” the spokesperson said.

First Horizon didn’t immediately respond to a request for comment.

The suit comes ten days after the filing of a separate proposed class action against TD Bank by First Horizon stockholders over the failed acquisition.

Pomerantz LLP and Wohl & Fruchter LLP represent Amicarelli and the proposed class members.

The case is Amicarelli v. First Horizon Corp., D.N.J., No. 23-cv-03024, complaint filed 6/1/23.