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Citigroup Fined $79M by British Regulators for $189B Error
May 22, 2024
Citigroup has been slapped with a $79 million (£62 million) by British regulators on Wednesday after the banking giant nearly dumped $189 billion in stock in the European market.
CNN reports that the fine was imposed by a few different organizations. The Financial Conduct Authority (FCA) hit the banking giant with a fine of $36 million, while the Bank of England’s Prudential Regulation Authority handed them a bill of $43 million.
The company’s initial fines totaled $112 million, but the company agreed to a settlement of 30% less than the initial bill.
“We are pleased to resolve this matter from more than two years ago, which arose from an individual error that was identified and corrected within minutes,” a Citigroup spokesperson said to CNN in a statement. “We immediately took steps to strengthen our systems and controls, and remain committed to ensuring full regulatory compliance.”
The FCA, meanwhile, alleged that a “fat-finger error” — which is an error that occurs thanks to a faulty computer input — was behind the snafu. The regulatory agency’s investigation concluded that a trader, whose identity has not been revealed, initially intended to only sell $58 million in stocks, but inputted a sale of $444 billion.
Citigroup subsequently blocked $255 billion of that sale, resulting in a net error that would have dumped $189 billion into the European market. Per CNN, “$1.4 billion worth of stocks was sold before the trader canceled the transaction.”
It is unclear whether the trader was terminated from their position in the company.
This is just the latest in struggles faced by America’s third-largest bank. Last November, Citigroup announced a significant number of layoffs as a component of a planned corporate setup restructure. This is an important turning point in the ambitious corporate transformation plan of CEO Jane Fraser.
This reorganization impacted a wide range of roles within the company, from managing directors and chiefs of staff to certain lower-level personnel. The “final changes” in the company were implemented by March.
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