Citigroup Fined $79 Million After UK Trader Makes $444 Billion 'Fat Finger' Error

By Trisha Andrada

May 22, 2024 08:50 AM EDT

Citigroup Inc., an American banking giant, was fined £61.7 million ($79 million) by British regulators for failing to prevent a "fat finger" mistake worth $444 billion.

Fat finger errors occur when people type data into a computer by accidentally hitting the incorrect key.

Citigroup to Close Down Global Distressed-Debt Business: Here's What to Know — British financial services authorities fined Citigroup $79 million for a 'fat finger' blunder that cost $444 billion. (Photo : Mario Tama/Getty Images)

Citigroup Global Markets Trader Requested $444 Billion in Share Sales Instead of $58 Million

According to the London Evening Standard, an investigation by the Financial Conduct Authority (FCA) found that on May 2, 2022, a trader at Citigroup Global Markets made an input error while trying to sell stocks.

They placed an order to sell $444 billion worth of shares rather than $58 million of shares. Citigroup was able to block only $255 billion of the trading order. The remaining $189 billion pushed through.

The trader managed to revoke the order, but only after selling $1.4 billion worth of shares. The size of such transactions alone caused a significant short-term decline in some European indexes.

The Euro Stoxx 50, the primary stock index of Europe, dropped by about 1% in three minutes in May 2022 after the mistake, losing over €80 billion (nearly $87 billion) before quickly recovering.

No Barrier Was Present to Reject the Erroneous Basket of Stocks

The FCA found that although some of Citigroup's controls performed as intended, other key controls were missing or inadequate. It said that the huge erroneous bundle of stocks made it to market since no solid block would have rejected it.

According to the watchdog, because of the design flaw, the trader was able to manually dismiss a pop-up warning without reading it. Citigroup also reportedly did not act quickly enough to raise internal notifications about the incorrect transactions, which resulted in Citigroup receiving a fine of £27.8 million ($35 million) from the FCA.

On the other hand, the Prudential Regulation Authority of the Bank of England issued its own fine of £33.9 million ($43 million) after its investigation. Bloomberg reported that the total value of the two fines is £61.7 million.