- Citigroup intended to make a loan interest payment of $7.8m to Revlon’s lenders
- But the bank accidentally wired $893m, an entire loan not due until 2023
- Some lenders returned the money but others refused, leaving Citi $501m short
- Citi sued but a judge ruled in the lenders’ favor because the money was owed
A judge has ruled Citibank cannot recoup half a billion dollars of its own money that it accidentally wired to lenders in one of the ‘biggest blunders in banking history’.
Citigroup intended to wire a $7.8million interest payment on August 11 to lenders for cosmetic company Revlon. It was sending the money on behalf of Revlon in its capacity as the company’s loan agent.
But the bank accidentally transferred $893million, enough to pay off the entire loan which was not due until 2023, and did not notice the gaffe until the following day, which they blamed on human error.
Some lenders returned the money after noticing the mistake but others refused to pay it back insisting the money was owed, leaving Citibank $501million out of pocket.
US District Judge Jesse Furman in Manhattan ruled the transfers were ‘final and complete transactions, not subject to revocation’.