By Michael Susin


The U.K. Financial Conduct Authority fined Citigroup Global Markets 27.8 million pounds ($35.3 million) after failings in the group's systems and controls led to $1.4 billion of equities being sold in error.

The watchdog on Wednesday said the problem occurred when a trader made an input error while selling a basket of equities of $58 million, resulting in the creation of a $444 billion basket. Citigroup Global Markets' controls blocked part of the basket, but $189 billion was wrongfully sent to a trading algorithm which placed portions of the order over the day.

"In total $1.4 billion 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 FCA said in a statement.

"These failings led to over a billion pounds of erroneous orders being executed and risked creating a disorderly market. We expect firms to look at their own controls and ensure that they are appropriate given the speed and complexity of financial markets."

Citigroup Global Markets agreed to settle and is qualified for a 30% discount, the FCA said, noting that the Prudential Regulation Authority has today also imposed a financial penalty of GBP33.9 million on the financial services group following their investigation into related matters.


Write to Michael Susin at michael.susin@wsj.com


(END) Dow Jones Newswires

05-22-24 0251ET