Investment bank Citigroup has been fined £61.6million by City regulators after one of its traders accidentally hit sell on $444billion (£348.9million) of shares instead of £45.6million.
The Financial Conduct Authority said that an experienced trader at Citi made an inputting error when making trades that “coincided with a material short-term drop” in some European markets. In the City, erroneous or accidental sales like this are referred to as “fat finger” trades.
Although Citi’s controls managed to block £255billion of shares from being sold, the rest were sent to a trading algorithm to sell over the course of the day. Over £1billion of shares were sold before the trader could cancel the order.
The FCA and the Bank of England described parts of Citi’s controls were “absent or deficient” and noted that there were no hard blocks to prevent such large, erroneous trades from being executed in the first place.
They also said that due to due to its poorly designed systems, Citi’s trader was able to override a pop-alert and that its real time monitoring was “ineffective”.
As a result, the FCA hit Citi with a £27.8million fine, while the Bank of England imposed a £33.9million penalty.
Sam Woods, deputy governor for prudential regulation at the Bank, said: “Firms involved in trading must have effective controls in place in order to manage the risks involved. Citi failed to meet the standards we expect in this area.”
Citi’s fines would have been 30% higher had it not co-operated and agreed to settle with the Bank and FCA.
