Citibank wire transfer blunder: customers get $ 500 million | Financial

According to CNN, an American judge determined this on Tuesday, referring to documents from the case.

Citbank worked as an intermediary for cosmetics company Revlon. It would transfer $ 8 million in interest payments to companies that lent to Revlon.

The banking team accidentally transferred nearly a hundredfold. Including another $ 175 million in a hedge fund. Altogether around $ 900 million.

Discovered after years

After finding the error a year later, Citibank started a series of lawsuits against the funds. That brought back nearly $ 500 million, but a dozen or so funds held on to about $ 500 million after the bank’s mistake.

Normally penalties follow for those who spend money wrongly received. Because errors in transfers happen regularly. But New York State law has exceptions, in this case the ‘discharge-for-value-defense‘.

Discovered after years

If the recipient was entitled to money, but did not know that it had been accidentally transferred, then they can keep it, according to CNN, the American judge interpreted the case at Citibank.

According to the funds, they correctly assumed that Revlon had advanced money in the run-up to a payment. So they could assume that the money was intended for them, the verdict is.

“We are very happy with Judge Jesse Furman’s thoughtful, detailed decision,” said Benjamin Finestone, Brigade’s and HPS Investment Partners’ representative, on the ruling against Citibank.

Wrong keys

As evidence for the lack of malice on the part of the recipients, the judge referred to requested chat traffic. In it, HPS employees joked among themselves.

‘I’m really sorry for the person who fat fingered (wrong key combination, ed.) $ 900 million wrongly transferred. Not a good career move .. ‘)

The judge pointed to the reputation of one of Wall Street’s largest banks. “To think that Citibank, one of the most developed financial institutions in the world, had made a mistake that had never been made before, amounting to nearly $ 1 billion, would be infinitely unrealistic.”

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