Due to a shocking "Oolong Finger" incident that shook the world, Citigroup has received a huge fine!
On May 22nd local time, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) under the Bank of England each disclosed a fine, both targeting Citigroup's trading system and control deficiencies, imposing a total fine of approximately £ 61.65 million (approximately RMB 568 million).
UK Financial Conduct Authority
It is understood that the fine for this day was still based on a discount. The regulatory authorities mentioned above stated that due to Citigroup's agreement to settle, they have reduced the fine by 30%. If there were no such discount, the total fine would exceed 88 million pounds.
The UK regulatory authorities have imposed penalties on Citigroup due to an "oolong finger" incident.
On May 2, 2022, the clock was set back. According to an official statement from the FCA, a trader at Citigroup in London originally intended to sell stocks worth $58 million, but made an input error while entering the instruction, resulting in the creation of a basket of stocks worth $444 billion.
Although Citigroup blocked $255 billion in transactions, unfortunately, it was unable to successfully intercept the remaining $189 billion in transactions. Before traders realized their mistake and cancelled their orders, European exchanges sold approximately $1.4 billion in stocks.
The European stock market immediately experienced a shocking scene: the Swedish OMX Stockholm 30 index suddenly plummeted rapidly during trading, expanding to 8% in just five minutes. The sudden plunge also affected major exchanges from Paris to Warsaw, causing chaos. Major European stock indices fell by 3% at one point, and the market value of European stock markets evaporated by 300 billion euros, equivalent to approximately 2.36 trillion yuan in Chinese yuan.
The UK Financial Conduct Authority and the Prudential Supervision Authority quickly intervened and ultimately discovered serious deficiencies in Citigroup's transaction controls, including a lack of certain preventive hard measures and improper calibration of other control measures, failing to detect and prevent erroneous transactions in a timely manner. In the end, the UK Financial Conduct Authority imposed a fine of approximately £ 27.77 million on Citigroup, while the UK Prudential Regulation Authority imposed a fine of £ 33.88 million on it.
Sam Woods, Chief Executive Officer of the UK Prudential Authority, said, "Companies participating in transactions must take effective control measures to manage the risks involved, and Citigroup has failed to meet the standards we expected in this regard."
According to media reports, Citigroup stated in a statement, "We regret the issue caused by personal error that occurred two years ago. The issue was discovered and corrected within a few minutes. We have taken prompt measures to strengthen our systems and controls, and continue to strive to ensure full compliance with regulations."
