The Financial Conduct Authority (FCA) has fined brokerage Citigroup Global Markets Limited (CGML) approximately £61.6 million for a systems and controls failure dating back to 2022. This failure led to the erroneous sale of USD 1.4 billion of equities in European markets.
On May 2, 2022, a Citigroup trader intended to sell equities worth USD 58 million but made an input error, resulting in a basket valued at USD 444 billion. While Citigroup’s controls blocked USD 255 billion, the remaining USD 189 billion was sent to a trading algorithm, leading to the sale of USD 1.4 billion in equities across European exchanges.
The FCA found that Citigroup’s trading control framework had deficiencies, particularly in rejecting large erroneous orders and ineffective real-time monitoring. Steve Smart, joint executive director of enforcement and market oversight at the FCA, emphasized the importance of appropriate controls in financial markets.
Citigroup did not dispute the FCA’s findings and agreed to settle, receiving a 30% discount on the penalty. Additionally, on May 22, 2024, the Prudential Regulation Authority (PRA) imposed a financial penalty of approximately Euro 33,880,000 on Citigroup following its investigation into related matters.