In one trading incident, Citigroup carried out $1.4 billion worth of sell orders when they only wanted to sell $58 million worth of shares. This is why British regulators fined the bank on Tuesday for not following trading controls.
Citi C, -0.72% was fined £61.6 million ($78.4 million) by the Bank of England and the Financial Conduct Authority between 2018 and 2022 for problems with its trading systems and controls.
The worst thing that happened was on May 2, 2022, which was a holiday in the UK. In its Delta 1 business, which works with institutional investors, corporations, and hedge funds, a trader who wanted to sell $58 million worth of stocks put in the wrong information: a basket of 349 stocks from different European markets that were worth $444 billion. The trader made a mistake by putting the value of the basket of stocks in the unit quantity field instead of the notional value field.
The trading mistake was caused by a trader entering incorrect information, but because of problems with primary control, $196 billion worth of wrong orders were sent to be executed in the company’s electronic trading system, CitiSmart. These orders were not canceled in full, so a total of $1.4 billion worth of sell orders were carried out across different European exchanges, the Bank of England said.
The MSCI Europe ex-UK index went down over 4% because of the chaos that followed.
It was the trader who discovered the error approximately 15 minutes after entering the order. The trading incident resulted in a $48 million loss for Citi, the FCA said.
The Bank of England noted that Citi repeatedly was given feedback about the poor state of its trading controls.
Citi said it was pleased to resolve the matter and that it has taken steps to strengthen its systems and controls.
