Citi trader believed to be behind European stock drop
Citigroup Inc. said its UK trading desk in London was behind a “flash crash” in Europe that sent stocks across the continent tumbling after a sudden 8 percent drop in Swedish shares.
“This morning, one of our traders made an error while entering a trade,” the New York-based bank said Monday night in an e-mailed statement. “Within minutes, we identified the error and corrected it.”
Citi Group is negotiating with regulators and exchanges about the incident, according to a person close to the matter who asked not to be named in discussing non-public information.
A five-minute sell-off in the OMX Stockholm 30 index wreaked havoc on stocks from Paris to Warsaw, sending Europe’s main index down as much as 3 percent. and wiping out 300 billion euros ($315 billion) at any given time.
A spokesman for Nasdaq Stockholm said the brief drop was not due to a technical problem. “Our first priority was to rule out technical problems with our systems, and our second priority was to rule out an external attack on our systems. Now we have ruled out both,” said David Augustsson, spokesman for Nasdaq Stockholm.
“We are very clear that the cause of this movement in the market is a very large transaction by a market player,” he said.