Mistakes in the workplace are inevitable, we all make them, but one Citigroup banker made a blunder of epic proportions – possibly the biggest ever witnessed on Wall Street.
During a relatively routine bank transfer, moving $280 to a client’s account last April, Citi accidentally approved an $81 trillion payment.
Fortunately, the error was spotted 90 minutes after the payment was sent. It took several hours for the transaction to be reversed but luckily no money left the bank or was lost…
Citi, Revlon lenders reach deal over $500 mln accidental payment https://t.co/bTTEFXlOZG pic.twitter.com/8PJTRAaeLo
— Reuters (@Reuters) December 17, 2022
False payout highlight’s operational issues at Citi
Nevertheless, the gaffe was another indication that Citi have yet to resolve a number of operational issues. In August 2020, the bank mistakenly wired $900 million to creditors of the cosmetics group Revlon instead of an interest payment .
In that instance, it was a software glitch that caused the phantom payment. These kinds of mistakes happen all the time in finance, and the normal outcome is that errors are detected and faulty payout are sent back, so no harm done.
However, on this occasion, the creditors Brigade Capital, Symphony Asset Management and HPS Investment Partners refused to. It culminated in a legal battle, which was settled out of court in December 2022. The error resulted in Citi cutting its fourth-quarter profits by $323 million and cost chief executive Michael Corbat his job.
In 2024, a total of 10 similar near misses of $1 billion or more were detected by Citi, according to an internal report seen by the Financial Times.
Citi announced fourth quarter 2024 earnings results today.
— Citi (@Citi) January 15, 2025
For complete information, please visit our Investor Relations website: https://t.co/CNHzcNb75a pic.twitter.com/gUOVaHFRIX
How much is a trillion?
To get an idea of the size of Citigroup’s bogus bank transfer – let’s just say it’s a 14-digit sum. A million has six zeros, there are nine zero’s in a billion and 12 in a trillion – in four groups of three. So Citigroup’s payment in full would read: $81,000,000,000,000.
So what could have caused the mistake this time? More software issues? A sticky keyboard? Absent-mindedness? Clumsy fingers? Who knows but it does little to enhance Citi’s reputation.
Wall Street banks now protect themselves from costly blunders with what is known in finance circles as the ‘Revlon Clause’ – a legally binding clause which allow them to demand the repayment of any money sent out to lenders by mistake.
Source| As USA
What will you do if a bank accidentally drops millions of dollars into your account? Comment below