Citi Trader Catches a Case of the Mondays — Briefly Crashes European Stock Market

Have you ever slept through an alarm after a long weekend? Forgotten to complete a report due early in the morning? Accidentally caused a flash crash in the European stock market and cost your company millions of dollars? 

Wait… repeat that last part? At least you weren’t that guy. Source: CNBC

That’s exactly what happened late Monday night when one employee at Citigroup made a manual error inputting a trade. That single mistake sent shockwaves through the European market, sending the OMX Stockholm Index down more than 8% in just 5 minutes — and dragging the entire European Index down 3% along with it. How much is 3%? About $315 billion USD. Yikes! 

Notably, the indices recovered most of the losses incurred from the “flash crash”. That same could not be said for Citigroup, as the Nasdaq has announced it will not reverse or cancel any of the trades made during the incident. 

You might be thinking, “I thought there were safeguards in place to prevent these sorts of errors from happening?” And there are some. But a large part of trading still takes place with human hands, leaving room for error. 

A look back at Citigroup’s history shows that this isn’t the first time a user-error has led to an embarrassing (and very public) blunder for the institution. 

Just two years ago, Citigroup made a similar $893 million dollar oversight when they mistakenly wired $893 million dollars to Revlon Inc. — rather than the $7.8 million that they intended to pay. The result was a lengthy legal battle in which a judge declared that Citigroup was not entitled to recoup their mistakenly wired money. 

The Bottom Line

Get some rest. Don’t trade when you’re half asleep. And always double check your orders — especially if you work at Citi.