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Citigroup Trader Went Through Several Alerts on ‘Fat Finger’ Trade

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Citigroup has said the trading error was identified and corrected within minutes.
Photo: GABBY JONES for The Wall Street Journal

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Citigroup Inc.
trader who sent European stock indexes into free fall last month was working from home and went through several alerts before his order went live, people familiar with the matter said.

The bank was able to quickly cancel some trades, but is facing about $50 million in losses, one of the people said.

On May 2, the trader in London, working at home on a bank holiday, entered a wrong figure while trying to place an order for a client, the people said.

Chaos ensued. Trading was halted momentarily in several markets after major stock indexes plunged for a few minutes in Europe.

“One of our traders made an error when inputting a transaction,” Citigroup said last month. “Within minutes, we identified the error and corrected it.”

Bloomberg reported earlier on the expected size of the bank’s loss.

The loss from reimbursing clients wouldn’t be material to the bank. Citi’s equity trading operation brought in $1.5 billion in revenue in the first quarter.

But the mistake comes at a delicate time. Citigroup is under a regulatory order to improve the technology and risk-management systems that protect the bank and customers, a multibillion-dollar project that is demanding the time and effort of senior managers.

Several top executives in Citigroup’s markets division have left this year, including its co-head

Carey Lathrop
and a onetime co-head of equities,

Dan Keegan.

The fact the trader was at home could also inflame debate across Wall Street about the future of work. Citigroup has taken a more progressive tack about remote work than other banks.

Citigroup doesn’t think working from home led to the trading mistake, a person familiar with the matter said.

Write to David Benoit at [email protected]

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