Citigroup is counting the cost of a fat-finger trade that led to a flash crash in European stocks after being fined £61.6 million by the UK regulators.
The American bank’s systems were poorly designed and ultimately ineffective as chaos was unleashed after a London-based Citi trader moved to sell a huge basket of equities in error on May 2, 2022.
According to the Financial Conduct Authority, $1.4bn of equities were sold across European exchanges, before the trader cancelled the order.
This coincided with a “material short-term drop” in some European indices which lasted a few minutes, it added.
The FCA and the Bank of England’s Prudential Regulation Authority (PRA) imposed stiff penalties for the systemic lapses that precipitated the market turmoil.
PRA CEO Sam Woods said: “Firms involved in trading must have effective controls in place in order to manage the risks involved. CGML failed to meet the standards we expect in this area, resulting in today’s fine.”
Source: proactiveinvestors.co.uk
