Citigroup Global Markets Europe AG has been hit with a SEK 6 million fine by the Disciplinary Committee of Nasdaq Stockholm, it was announced on Monday.
Citigroup Fined SEK 6 Million for Breach of Nasdaq Nordic Member Rules
The financial giant was found to have breached several rules, including a failure to implement sufficient pre-trade controls and a lack of adequate monitoring of trading activity.
The incident that led to the fine occurred on May 2, 2022, when a significant price drop was observed across multiple financial instruments and indices traded on Nasdaq Nordic markets.
The brief but dramatic market event, which lasted approximately seven minutes, saw indices in Denmark, Finland, and Sweden plummet by up to 8%.
Nasdaq said its investigation revealed Citigroup’s trading activity was a major contributor to the market disruption.
The Disciplinary Committee concluded that the company’s control systems were inadequate, allowing a trader to execute erroneous orders worth a staggering 189 billion dollars.
“The Disciplinary Committee states that it is evident that the Company’s trading control system did not prevent an individual trader from executing erroneous orders with a total value of 189 billion dollars, and that the warnings the trader received in the system could easily be dismissed,” explained Nasdaq Stockholm.
They added that their committee expressed serious concern over the company’s internal controls and the potential impact of the incident on market stability.
Furthermore, they state that Citigroup did not have the required trading control systems considering the nature and scope of its operations and they see “no reason to doubt that the Market Event was initiated and predominantly caused by the actions of the company’s trader and the deficiencies in the company’s control system.”
