Bank fined after trader’s $444 billion ‘fat finger’ error

Financial services watchdogs have fined US banking giant Citigroup £61.7 million after its systems failed to prevent a $444 billion ‘fat finger’ error—an amount exceeding Denmark’s GDP.

According to the Financial Conduct Authority (FCA), a Citigroup Global Markets trader made an “inputting error” on May 2, 2022, attempting to sell $58 million worth of shares but mistakenly ordering the sale of $444 billion.

Citigroup managed to block $255 billion of the order, but $189 billion still went through. A trading algorithm was tasked with selling the massive order throughout the day. The trader canceled the order, but not before $1.4 billion of shares were sold, causing a significant short-term drop in European indices. The Euro Stoxx 50 fell over 1% in three minutes, losing more than €80 billion before rebounding.

The FCA found that while some of Citigroup’s controls worked as expected, others were deficient or absent. Specifically, there was no hard block to reject the large erroneous order, and the trader could manually override a pop-up alert due to poor design. Citigroup was also slow to escalate internal alerts about the error.

Consequently, the FCA fined Citigroup £27.8 million, reduced by 30% for non-disputation. The Bank of England’s Prudential Regulation Authority issued an additional £33.9 million penalty for related issues, totaling £61.7 million in fines.

Steve Smart, FCA joint executive director of enforcement and market oversight, emphasized the need for firms to have effective systems and controls to prevent such errors, highlighting the risk of creating a disorderly market.