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Human error: Citigroup gets their money back, but the disgrace will remain
Photo: Mark Lennihan/AP
The major US bank Citigroup has prevailed in the legal dispute over the reimbursement of around half a billion dollars that was accidentally transferred.
A Manhattan appeals court overturned the lower court's verdict and ruled that the financial group was entitled to the money.
The recipients should have been aware that the transfer was a glitch, the judges reasoned.
Several US media reported on the case.
The wrong transfer caused a stir in August 2020: On behalf of the cosmetics manufacturer Revlon, Citi accidentally paid in full a loan of almost 900 million dollars that was actually only due in 2023 with creditors – hedge funds and other professional investors.
Interest payments of only $7.8 million would have been due.
Since only some of the lenders returned the money, a legal battle ensued for around $500 million.
Embarrassing company chapter
Citigroup can breathe a sigh of relief after the appeal verdict, but the mishap should be remembered as an embarrassing chapter.
The bank blamed human error, but the mishap brought it a lot of ridicule and malice, and not just on Wall Street.
In the first instance, Citi suffered a defeat.
At the time, the judge ruled that it was irrational to assume that a highly developed financial group would make a bad transfer of this magnitude.
atb/dpa
