Citigroup Fined £61.6 Million by UK Regulators for Trading System Failures

Citi

Britain’s banking and financial regulators announced on Wednesday that they had fined U.S. bank Citigroup more than 61.6 million pounds ($78.5 million) for failures in its trading systems and controls, marking one of the largest fines for controls breaches in the UK since the global financial crisis in 2008-2009.

The Prudential Regulation Authority (PRA) stated that issues at Citigroup Global Markets Limited (CGML) had “crystallised into trading incidents,” citing an example in May 2022 when an “experienced trader incorrectly inputted an order,” resulting in $1.4 billion being executed on European exchanges by mistake.

Citi

“Deficiencies in CGML’s trading controls contributed to this incident, in particular the absence of certain preventative hard blocks and the inappropriate calibration of other controls,” the PRA noted.

Despite repeated supervisory communication from the PRA to improve, weaknesses persisted at Citi, according to the regulator.

The PRA fined Citi 33.88 million pounds for failings in its trading systems and controls between April 1, 2018, and May 31, 2022, with the fine reduced by 30% after Citi agreed to address the issue. The Financial Regulation Authority also fined Citi 27.76 million pounds following a similar investigation.

Sam Woods, CEO of the PRA and the Bank of England‘s deputy governor for prudential regulation, emphasized the importance of effective controls for firms involved in trading. “CGML failed to meet the standards we expect in this area, resulting in today’s fine,” he stated.

Citi spokesperson Victoria Durman expressed the bank’s satisfaction in resolving the matter, which stemmed from an individual error identified and corrected within minutes. “We immediately took steps to strengthen our systems and controls, and remain committed to ensuring full regulatory compliance,” Durman said via email.

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