People walk past the CitiBank office in Manhattan on March 1, 2024 in New York City.
Spencer Platt | Getty Images
LONDON — British regulators on Wednesday imposed fines totaling 61.6 million pounds ($79 million) on a U.S. investment bank. City for failures in its trading systems and controls.
The fines were imposed by the Prudential Regulation Authority and the Financial Conduct Authority, whose investigation focused on the period from 1 April 2018 to 31 May 2022. Citi was entitled to a 30% reduction in the fine after agreeing to resolve the cause.
“Firms trading must have effective controls in place to manage the risks involved. KSML [Citigroup Global Markets Limited] unsuccessful “We want to meet the standards we expect in this area, which has led to today’s fine,” Sam Woods, deputy governor for prudential regulation and chief executive officer of the PRA, said in a statement Wednesday.
Regulators said certain system and control problems persisted during the investigation period, which led to trading incidents such as so-called gross trading errors. The main incident in question occurred on May 2, 2022, when an experienced trader entered an order incorrectly, resulting in “$1.4 billion being unintentionally executed on European exchanges.”
“Weaknesses in CGML’s trade controls system, particularly the lack of certain proactive hard locks and inadequate calibration of other controls, contributed to this incident,” the statement said.
In a statement to CNBC, a Citi spokesperson said the bank was pleased to resolve the issue, which arose more than two years ago, “which was due to an individual error that was identified and corrected within minutes.”
“We immediately took steps to strengthen our systems and controls and remain committed to ensuring full compliance with regulatory requirements.” said the representative.