The British Financial Services Authority fined Citigroup Global Markets Limited £13.9 million Tuesday for a controversial illegal bond trade in August 2004.
The FSA said in a news release that Citigroup built up, then rapidly exited from “very substantial long positions in European government bonds” in one hour. It said the trade caused a temporary disruption to the volumes of bonds traded and quoted on the MTS platform and a sharp drop in bond prices August 2.
The FSA said Citigroup failed to conduct business with “due skill, care and diligence” and failed to “control its business effectively.”
“CGML planned, authorised and executed a trading strategy without having due regard to the risks and likely consequences of its actions,” said Hector Sants, FSA managing director of wholesale business, said in a statement.
The fine is the second-largest the FSA has levied.
Reuters reported that Citigroup generated $17 billion in net income last year.