Citi fined £61.6m by UK regulators for “failures in its trading systems and controls”
Citigroup Global Markets Limited (CGML) has been fined £61.6 million by UK regulators for historic failings in its trading systems and controls.
CGML fined £61.6m by PRA and FCA
The total penalty consists of a £33,880,000 fine from the Prudential Regulation Authority (PRA) and a £27,766,200 fine from the Financial Conduct Authority (FCA).
Relating to an incident from 2022, the FCA says failures in the firm’s systems and controls “led to $1.4bn of equities being sold in European markets when they should not have been”.
It says on 2 May 2022, a CGML trader sought to sell a basket of equities worth $58 million. When entering the basket into an order management system, the trader erroneously created an order worth $444 billion, over 760,000% of the original intended value.
Fortunately, CGML’s controls blocked $255 billion of this order from progressing, but $189 billion was sent through to a trading algorithm “designed to place portions of this total order to be sold in the market over the rest of the day”.
The FCA says: “In total, $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.”
The PRA says that “deficiencies in CGML’s trading controls” contributed to this incident, including the “absence of certain preventative hard blocks” and “the inappropriate calibration of other controls”.
CGML’s cooperation with the investigations resulted in a 30% reduction in both fines.
In a statement, Citi says: “We are pleased to resolve this matter from more than two years ago, which arose from an individual error that was identified and corrected within minutes. We immediately took steps to strengthen our systems and controls, and remain committed to ensuring full regulatory compliance.”
