Citi Fined by Swiss Exchange Regulator Over 2022 Fat-Finger Flash Crash

(Bloomberg) — Citigroup Inc. was fined 500,000 Swiss francs ($568,000) by Switzerland’s stock exchange regulator for failures after a London staffer’s fat-finger trade caused a flash crash in European stocks in 2022.  

The total value of the erroneous trades executed on the exchange before the order was canceled was almost 108,379,000 Swiss francs, the SIX Sanctions Commission said in a statement on Friday. The incident led to the Swiss SMI benchmark index temporarily falling by more than 1.6%. 

“We are pleased to resolve this matter from more than two years ago, which arose from an individual error that was identified and corrected within minutes,” a Citigroup spokesperson said in a statement. Citigroup said it immediately took steps to strengthen its controls. 

Citigroup got off lightly with the Swiss. The bank was fined £61.6 million ($79.6 million) by the UK’s Financial Conduct Authority last year for failures linked to the fat-finger trade. The employee had intended to sell a basket of equities valued at $58 million but made an error while inputting the order that resulted in a basket valued at $444 billion being created instead, according to the FCA.

Citigroup’s controls did block a portion of the trade from going through, but not all of it. About $1.4 billion worth of equities were sold across European exchanges before the trader canceled the order. The bank has also been fined by Germany’s regulator over the incident.

Citi has since been caught up in other fat-finger errors. Last April, the bank almost shifted about $6 billion to a customer’s account by accident after a staffer handling the transfer copied and pasted the account number into a field for the dollar figure. It happened in the same month that another part of the bank accidentally credited $81 trillion to a different client. 

–With assistance from Allegra Catelli.

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