As per the Bloomberg report, a Citigroup Inc's (NYSE:C) trader made a mistake "inputting a transaction," the bank said, after a selloff in Swedish stocks in five minutes wreaked havoc, wiping out €300 billion ($315 billion) at one point.
The bank said it identified the error "within minutes" and corrected it. The incident is a fresh setback to Citigroup's efforts to improve controls.
Two years ago, Citigroup's employees mistakenly sent almost $1 billion to Revlon Inc (NYSE:REV) creditors, which resulted in a lengthy public court battle to recover the funds.
According to a person familiar with the matter, Citigroup is in talks with regulators and exchanges about Monday's incident.
A spokesman for Nasdaq Stockholm had said the short-lived slump wasn't a technical glitch on its part. "Our first priority was to exclude technical issues in our systems, and our second priority was to exclude an external attack on our systems," said David Augustsson, a spokesman for Nasdaq Stockholm.
"It is very clear to us that the cause of this move in the market is a very substantial transaction made by a market participant."
The OMX Stockholm 30 Index closed 1.9% lower, roughly in line with a drop in European markets. It had slumped as much as 8% in just five minutes before recovering most of the losses shortly after.
Joakim Bornold, a savings economist at Soderberg & Partners, said that equity markets could be susceptible to erroneous trades despite safeguards.
The error could potentially cause monetary and reputational damage to Citigroup, as Nasdaq said it would not cancel any trades made on the Nordic markets.
Price Action: C shares traded 0.47% lower at $48.48 premarket on the last check Tuesday.
