Citigroup credited $81 trillion to a customer’s account, instead of just $280, and took hours to reverse the transaction — an embarrassing “near miss” for a bank that has struggled to fix operational issues.
The financially seismic error, which occurred last April, was missed by a payments employee and a second official assigned to check the transaction before it was cleared to be processed the next day, the Financial Times reported on Friday.
A third employee caught the error nearly two hours after the payment was processed and the transaction was ultimately reversed several hours later, according to two people familiar with the event.
The $280 was supposed to be placed in a customer’s escrow account in Brazil before the 14-figure sum was blocked by a screen that catches payments that are potential sanction violations, FT reported.
Nonetheless, the $81 trillion payment had been cleared after being manually inputted into a rarely used program that pre-populates with 15 zeros, which the person handling the transaction didn’t delete, according to the outlet.
No funds ended up being disbursed by Citi, which disclosed the near miss — when a bank processes the wrong amount but is able to recover the funds — to the Federal Reserve and the Office of the Comptroller of the Currency (OCC), FT reported.
“Our detective controls promptly identified the inputting error between two Citi ledger accounts, and we reversed the entry. Our preventative controls would have also stopped any funds leaving the bank,” a Citi spokesperson told The Post.
The rep added that “a payment of this size could not actually have been executed.”
But the near-miss could be a blow to CEO Jane Fraser’s attempt to convince federal regulators that she has stamped out the bank’s operational errors.
A similar blunder led to the ouster of Fraser’s predecessor Michael Corbat after the bank mistakenly sent $900 million to creditors of cosmetic giant Revlon.
The Financial Times cited a leaked internal Citi report that stated that there had been 10 “near misses” of $1 billion or more in 2024, down from 13 the previous year.
The feds slapped the company with a $136 million fine last year for “insufficient progress” in fixing data management issues first identified in 2020.
Last month, Citi CFO Mark Mason said the bank is investing more to address its compliance issues, referring to regulatory penalties for risk management and data governance.
“We saw the need to invest more in the transformation on data, on technology, on improving the quality of the information coming out of our regulatory reporting,” Mason said.
In 2022, a Citi employee sparked a stock market rout in Europe by accidentally adding a zero to a trade.
It led to a sell-off that wiped roughly $322 billion from European stocks.
Credit: Source link
