TD takes hit on 'incorrectly priced financial instruments'

Toronto-Dominion Bank has disclosed a $96-million loss caused by “incorrectly priced financial instruments” at the TD Securities office in London.

The bank blamed “an individual who is no longer with the company” and said Friday it is co-operating with regulators.

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The financial instruments were credit index swaps — complex futures or derivatives contracts used by traders to spread credit risks.

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TD was widely hailed by analysts earlier this year for its tight risk-management practices, which helped the financial institution avoid the massive debt writedowns that dragged its five main Canadian rivals to post billions of dollars in losses linked to the subprime-mortgage market in the United States.