US banking giant Citigroup has been hit with one of the largest fines for control breaches in the UK since the 2008 financial crisis, totalling £61.6 million.

The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) imposed the hefty penalties after identifying persistent failures in Citi’s trading systems and controls over a four-year period.

The PRA fined Citigroup's UK division, Citigroup Global Markets Limited (CGML), £33.88 million for weaknesses between April 2018 and May 2022 that "crystallised into trading incidents". This included a major error in May 2022 when an experienced trader incorrectly inputted an order, inadvertently executing $1.4 billion worth of trades on European exchanges.

The PRA said deficiencies such as a lack of preventative hard blocks and inappropriate calibration of other controls contributed to the incident. Despite repeated warnings to improve, the weaknesses persisted.

The FCA imposed an additional £27.76 million penalty on CGML following its own investigation into related matters.

Sam Woods, PRA CEO and Bank of England Deputy Governor, said: "Firms involved in trading must have effective controls to manage the risks. CGML failed to meet the standards we expect, resulting in today's fine."

Citigroup agreed to resolve the matter, allowing a 30 per cent discount on the PRA portion, which would otherwise have been £48.4 million alone.

A Citigroup spokesperson told Reuters over email the bank was "pleased to resolve this matter" arising from an "individual error" over two years ago, adding it "immediately took steps" to strengthen systems and remains committed to compliance.

The penalty represents one of the largest for control failings since the global financial crisis over a decade ago.

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