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Expensive glitch: Citigroup has lost a legal battle over the refund of half a billion dollars that the financial giant accidentally transferred.
The responsible judge Jesse Furman ruled on Tuesday (local time) in New York that the recipients of the money from the major US bank do not have to repay an amount of around $ 500 million (413 million euros).
Citigroup immediately announced an appeal against the judgment.
The case caused a stir last August: Citigroup accidentally repaid in full a loan of almost $ 900 million from creditors - hedge funds and other professional investors - which was actually due in 2023 on behalf of cosmetics manufacturer Revlon.
There would have only been an interest payment of $ 7.8 million.
The bank blamed human error for the mishap and asked for a refund.
Since only some of the lenders voluntarily returned the money, a lawsuit broke out.
Judge Furman based his judgment on the fact that it is irrational to assume that a highly developed financial group such as Citigroup will make an incorrect transfer of this size.
The key question in the process was whether creditors should have assumed that the early repayment of the loan and interest was unintentional.
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Citigroup does not want to accept the judgment, however.
A spokeswoman said the bank did not agree with this at all and intended to appeal.
“We believe that the money is due to us and will continue to pursue a full refund.” Another option to at least limit the financial damage could be to try to get the funds back from Revlon.
Because the wrong transfer was made from Citi's own accounts.
However, that should lead to even more legal trouble.