Fat-Finger Trade sees Citibank lose more Than $50 Million

    According to people with knowledge of the matter, Citigroup Inc. may lose $50 million following a fat finger trade by one of its staff in London that caused a crash in the European stocks in May.

    The bank is still reconciling losses caused by the mistaken trade, and according to one of the people asking not to be identified as this private matter, the final figure could balloon higher.

    What actually happened?

    A trader in the company’s Delta One Trading division in London erroneously added an extra zero to a trade order in the early hours of the European market while working from home on May 2, which was a bank holiday.

    The OMX Stockholm 30 Index saw a five-minute sell-off caused by the blunder. It wreaked havoc across stock markets stretching from Warsaw to Paris and wiping off nearly $322 billion (300 billion Euros) at one time.

    The Citibank staff who made a mistake has been placed on leave while the bank reviews the incident. According to one of the people, Citibank has attributed the error to a human error and not to the fact that the staff was remote working from home.

    A spokeswoman declined to comment on the bank’s behalf.

    The error has caused a significant blow to the bank’s CEO, Jane Fraser, and to the equity chief of Citibank, Fater Belbachir, who was looking to increase the revenue from stock trading for the bank. In 2021, Citibank earned $4.55 billion from equity trading, a growth of 25% over the previous year.

    Trading products from Delta One allows clients to take positions in hedging or bet on directional moves in the derivative segment or from the basket of securities. Using Delta One’s trading strategies is less costly than exploring all the stocks involved.

    The Citibank system usually breaks up large trade orders into smaller bets automatically. The internal algorithms of the bank stopped small blunders, and other trades were allowed to go through. The bank is investigating why the algorithms were programmed so that the system permitted mistaken trades, according to one of its people,

    Citibank has been talking to the exchanges and regulators regarding last month’s incident. The bank is overhauling its systems and internal technologies to improve its internal controls, which is a part of the consent orders it had agreed upon with the U.S regulators in 2020.



    RELATED ARTICLES

    Tesla’s Cheapest Cybertruck

    Tesla’s Cheapest Cybertruck Will Cost $60,990 in 2025

    Bloomberg News reports that after two years of delay and production glitches, Tesla Inc. has...
    JPMorgan’s S&P 500

    JPMorgan’s S&P 500 2024 Outlook Grimmest on Wall Street

    Bloomberg News reports that as the strategists on Wall Street are calling for an all-time...
    Fed Will Cut Interest Rates

    Fed Will Cut Interest Rates as Soon, Predicts Bill Ackman

    Bloomberg News reports that Bill Ackman, the billionaire investor, bets that the Federal Reserve will...
    AI Startup

    AI Startup of Google Raises $24 Million for Biotech Work

    Bloomberg News reports that the European biotech startup Cradle has raised as much as $24...
    Quantum Computing Lab

    Quantum Computing Lab Shut by Alibaba in Sign of Broader Cutback

    Bloomberg News reports that Alibaba Group Holding Ltd. has shuttered its quantum computing lab for...
    Water Damage Repairs

    Don’t DIY Water Damage Repairs to Your Business

    If your workplace ever suffers from water damage, you might be tempted to start fixing...
    MBA Programme

    Dual Degree MBA Programme: A Unique Educational Opportunity

    In today's world, professional success requires more than traditional management skills. It calls for a...
    women ipl

    Women IPL Sensation Shreyanka Patil: From Fan to Champion

    In a cricketing universe usually ruled by dudes, Shreyanka Patil, the rookie wonder for Royal...
    Monetize Magnet

    Monetize Magnet Review – The Best Crypto and Forex CPA Network

    In today's world, cryptocurrency has reached new heights, expanding continuously and providing online earning opportunities...
    celsius drink

    Celsius Drink – What Is It and How Safe Is It?

    These days, you must come across your social media feeds with an advertisement for a...
    low porosity hair

    Low Porosity Hair Problem? Slay Locks with Moisture Miracle

    Have you ever experienced your hair being stubbornly resistant to moisture? That's low porosity hair...