Citigroup Fined £61.6m by UK Regulators Over Trading Failures

Citigroup Global Markets Limited (CGML) has been fined a total of £61.6 million by UK regulators for deficiencies in its trading systems and controls, which led to a significant trading error in 2022.

The penalties include a £33.88 million fine from the Prudential Regulation Authority (PRA) and a £27.77 million fine from the Financial Conduct Authority (FCA).

The incident occurred on May 2, 2022, when a CGML trader mistakenly attempted to sell a basket of equities valued at $444 billion instead of the intended $58 million, an error exceeding the original value by over 760,000%. CGML’s controls managed to block $255 billion of the erroneous order, but $189 billion was executed by a trading algorithm before being halted.

This error resulted in $1.4 billion worth of equities being sold on European markets, causing a brief but notable drop in some European indices.

The FCA criticised CGML for its inadequate systems and controls, which failed to prevent the massive order. The PRA also highlighted deficiencies, including the lack of essential preventative measures and improperly calibrated controls.

As a result of CGML’s cooperation with the investigation, both fines were reduced by 30%. In response, Citigroup stated: “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.”