On May 2, 2022, a brief «flash crash» unsettled stock markets. It quickly became clear that the trigger was a mistakenly executed sell order worth billions by Citigroup.

Now, the German financial market regulator Bafin has imposed a fine of 12,975 million euros on Citigroup Global Markets Europe. In a statement on Thursday, it justified the fine by saying the bank did not have suitable systems and risk controls in place in 2022 to ensure that its trading systems were subject to appropriate trading thresholds and limits.

Potential for Market Disruption

The bank «also did not ensure that the transmission of erroneous orders was prevented. Erroneous orders can trigger or at least contribute to market disruptions,» the authority further wrote.

The mishap is attributed to an individual error by a trader. The bank executed an order worth 444 billion dollar, which should have only been 58 million dollar. This mistakenly triggered sell orders for shares worth 1,4 billion dollar.

Such incidents are known in the industry as «fat-finger» errors.

Already in May, Citigroup was fined 61,6 million pounds by the British authorities. According to media reports at the time, the error caused the bank a loss of around 50 million dollar.

Matter Resolved

Citigroup in Frankfurt stated that it had taken steps to strengthen systems and controls and remains committed to ensuring full regulatory compliance. «We are pleased to resolve this matter from more than two years ago, which was due to an individual error that was identified and corrected within minutes,» the news agency «Reuters» quoted from a statement.