- Citigroup (C) mistakenly credited a client’s account with $81 trillion instead of $280 last April, an error caught and reversed internally within hours, as reported by the Financial Times, highlighting ongoing operational weaknesses.
- The blunder, caused by a manual input error in a backup system with 15 pre-populated zeros, adds to Citi’s 10 near misses of $1 billion or more last year, down from 13 the prior year, per an internal report cited by the FT.
- Despite no funds leaving the bank and a $136 million fine last year for risk control failures, the incident – disclosed to regulators – challenges CEO Jane Fraser’s efforts to fix issues stemming from a $900 million Revlon payout error nearly five years ago.
Citigroup (C), one of Wall Street’s most prominent institutions, found itself grappling with a staggering operational blunder when it erroneously credited a client’s account with $81 trillion instead of the intended $280, a mishap first brought to light by the Financial Times. This incident, occurring last April, underscores the persistent challenges the bank faces in convincing regulators like the Federal Reserve and the Office of the Comptroller of the Currency that it has resolved deep-seated control issues. According to the FT’s reporting, which cited an internal account and two individuals familiar with the event, the error slipped past a payments employee and a second official tasked with verification, only to be caught 90 minutes later by a third staff member who noticed irregularities in the bank’s account balances, with the transaction reversed several hours after that.
The $81 trillion figure, dwarfing Citigroup’s market capitalization and the entire U.S. GDP, stemmed from a manual input error exacerbated by a poorly designed backup system, where a field pre-populated with 15 zeros was not properly adjusted. The FT detailed how this stemmed from an attempt to process four transactions totaling $280 for a customer’s escrow account in Brazil, initially flagged by a sanctions-screening tool in mid-March and subsequently misrouted through an infrequently used interface. Citigroup stressed that its detective controls identified the mistake between two internal ledger accounts, ensuring no funds left the bank, and a spokesperson told the FT that such mechanisms would have prevented any external transfer, framing the episode as evidence of ongoing efforts to automate processes and eliminate manual vulnerabilities.
This “near miss,” as disclosed to regulators, adds to a troubling pattern at Citi, with an internal report seen by the FT revealing 10 incidents of $1 billion or more last year, down from 13 the prior year—figures the bank declined to comment on. Unlike actual losses, these near misses, where incorrect amounts are processed but recovered, don’t require public disclosure, leaving the industry’s broader exposure opaque, though former regulators and risk experts told the FT that events exceeding $1 billion are rare among U.S. banks. The $81 trillion error, while contained, echoes a prior debacle nearly five years ago when Citi inadvertently sent $900 million to Revlon creditors, a mistake that toppled then-CEO Michael Corbat and triggered $400 million in fines alongside consent orders mandating systemic fixes.
Jane Fraser, who succeeded Corbat in 2021, has made overhauling Citi’s risk management her top priority, yet the bank faced a $136 million penalty from the OCC and Federal Reserve last year for lagging progress on data and risk controls. The FT’s account of the April incident points to human error compounded by technological quirks, highlighting the fragility of Citi’s operational framework despite Fraser’s multi-billion-dollar modernization push. With no funds lost and the error confined internally, Citigroup maintains that its safeguards worked, yet the scale of this near miss – trillions beyond reason – casts doubt on the robustness of those claims. As the bank strives to shed its reputation for such lapses, the FT’s reporting serves as a critical reminder that Citi’s journey toward operational resilience remains fraught, with each stumble amplifying scrutiny from regulators and investors alike.
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