Citigroup may record losses of at least $50 million following a London staffer’s fat-finger trade that caused a flash crash in European stocks last month, according to people familiar with the matter.
The bank is still tallying losses from the
The blunder sparked a five-minute selloff in the OMX Stockholm 30 Index and ultimately wreaked havoc in bourses stretching from Paris to Warsaw and wiping out 300 billion euros ($322 billion) at one point.
The staffer has since been placed on leave as Citigroup reviews the incident, the people said. The firm has so far determined it was human error that resulted in the trade, and not the fact that the staffer was working from home, one of the people said.
A spokeswoman for Citigroup declined to comment.
The mistake is a blow for Chief Executive Jane Fraser as well as the firm’s equities chief Fater Belbachir, who has been seeking to increase revenue Citigroup earns from stock trading. The bank generated
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Generally, Citigroup’s systems automatically break up such large trades and place them as smaller bets. While some of those smaller mistaken trades were stopped by the firm’s internal algorithms following the blunder, others were still allowed to go through. Citigroup is investigating why its algorithms were configured in such a way that the mistaken trades were permitted by the firm’s systems, one of the people said.
Citigroup remains in talks with regulators and exchanges about last month’s incident, according to one of the people.
The firm is in the midst of a yearslong overhaul of many of its underlying technologies and systems as it seeks to improve its internal controls — part of an effort to satisfy a pair of consent orders it entered into with U.S. regulators in 2020.
