By Michael Susin

A Citigroup subsidiary was fined 61.6 million pounds ($78.3 million) by two U.K. regulators after failings in the group's systems and controls led to $1.4 billion of equities being sold in error.

The Financial Conduct Authority said an error by a trader at Citigroup Global Markets lead to a $444 billion basket of equities, instead of $58 million. The U.S. banking group's controls blocked part of the basket, but $189 billion was wrongfully sent to a trading algorithm, which placed parts of the order over the course of the day.

The British authority said the error was caused by Citigroup Global Markets' system design, which allowed the trader to manually override a pop-up alert. It also called the company's real-time monitoring ineffective.

"In total $1.4 billion of equities were sold across European exchanges, before the trader cancelled the order. This coincided with a material short-term drop in some European indices which lasted a few minutes," the FCA said on Wednesday.

"These failings led to over a billion pounds of erroneous orders being executed and risked creating a disorderly market. We expect firms to look at their own controls and ensure that they are appropriate given the speed and complexity of financial markets."

Following two separate investigations, the FCA fined the financial-services company GBP27.8 million, and the Prudential Regulation Authority fined it another GBP33.9 million.

Citigroup Global Markets agreed to settle both penalties and is qualified for a 30% discount.

In a statement, the bank said the error was identified and corrected within minutes.

"We are pleased to resolve this matter from more than two years ago...We immediately took steps to strengthen our systems and controls, and remain committed to ensuring full regulatory compliance," a Citi spokesperson said.

Write to Michael Susin at

(END) Dow Jones Newswires

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