Leon Neal/Getty Images
Citigroup’s London office, photographed in January 2024.
London
CNN
—
British regulators on Wednesday accused Citigroup of a total of 62 million pounds ($79 million) after a failure in its trading systems threatened to dump $189 billion worth of shares into European markets. fined.
The Financial Conduct Authority (FCA)C) Meanwhile, the Bank of England’s prudential regulator has fined the U.S. bank about 34 million pounds (about $43 million) following an investigation into the bank, the regulator said in a statement.
Regulators reduced the fine by 30% after Citigroup agreed to resolve the issue. Without this discount, the total fine would have exceeded £88 million ($112 million).
“We are pleased to be able to resolve this issue that occurred more than two years ago. This issue arose from an isolated mistake that was identified and fixed within minutes,” a Citigroup spokesperson told CNN. told. “We took immediate steps to strengthen our systems and controls and remain committed to ensuring full regulatory compliance.”
A spokesperson declined to comment on reports that the transaction was the result of a fat finger error, where the wrong key was pressed and incorrect data was entered.
The Bank of England said one of Citigroup’s “seasoned” traders accidentally sold $1.4 billion worth of shares on a European exchange in May 2022, a phenomenon the brokerage called a “flash crash” at the time. It highlighted the incident that caused the
The FCA said in a statement that the unnamed trader had intended to sell just $58 million worth of shares but made a “typographical error” that resulted in the order to sell $444 billion.
Citigroup’s systems blocked $255 billion of that, meaning $189 billion was transferred to the company’s trading platform. It will be sold “for the rest of the day.” A total of $1.4 billion worth of shares were sold before traders canceled the trade.
“There was no hard block to reject this large, erroneous basket of shares as a whole and prevent any part of it from circulating in the market,” the FCA said, adding that the failure risked creating a “disorderly market”.
The FCA also noted that traders could manually override pop-up alerts without having to read all the details of them, and that the bank’s “inefficient” real-time monitoring meant that alerts were escalated too slowly.
Following the incident, Citigroup took steps to “improve and strengthen” the security of its trading systems, the central bank said.
“Companies involved in trading must have effective controls in place to manage the risks involved. (Citigroup) failed to meet the standards we expect in this area, which is why today’s fine is due. “It was imposed,” said Sam Woods, chief executive officer of the Prudential Regulation Authority.
This isn’t the first time Citigroup has made a blunder.
In 2020, the bank mistakenly transferred $900 million in interest to cosmetics company Revlon’s lenders, more than 100 times the scheduled amount. Some lenders returned the money, while others did not. US District Court Judge control In 2021, banks will not be able to collect the $500 million they owe.
In 2014, another trading mishap unrelated to Citigroup shook Japan’s stock market. According to the BBC, anonymous brokers placed orders for more than $600 billion worth of stocks and then canceled them shortly after. report at that time.
This article has been updated with additional information.
