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Banks: Erroneous share sale – Citigroup has to pay millions

Banks: Erroneous share sale – Citigroup has to pay millions

An input error on the computer briefly causes chaos on several stock exchanges. The bank responsible now has to pay a heavy fine.

The major US bank Citigroup has to pay a million-dollar fine for mistaken share sales in the UK. A stock trader’s mistake led to the unintentional sale of securities worth 1.4 billion US dollars (1.3 billion euros) in 2022. The bank’s internal controls did not prevent this, the British financial market regulator FCA announced on Wednesday. It criticized the institute’s systems and control mechanisms.

In total, Citigroup is now paying a good 61.6 million British pounds (a good 72 million euros) in fines. The sum is made up of two parts – a fine from the FCA itself and another imposed by the financial services regulator PRA.

A stock trader caused the damage. He actually wanted to sell securities worth $58 million. However, according to the FCA, an input error resulted in a share package worth $444 billion. The bank’s control systems prevented some, but not all, of the unwanted sales. Ultimately, about $1.4 billion worth of shares were sold on European exchanges before the trader canceled the order.

“Some primary controls were missing or deficient,” the FCA wrote. Above all, there was no hard block that would have rejected this large basket of stocks altogether and prevented any of it from entering the market.

The error triggered a five-minute sell-off in the OMX Stockholm 30 index and caused chaos on stock exchanges from Paris to Warsaw. According to the Bloomberg news agency, a market value of around 300 billion euros was temporarily destroyed.

Source: Stern

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