Citi fails in bid to claw back $500m error thetimes.co.uk - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from thetimes.co.uk Daily Mail and Mail on Sunday newspapers.
(Bloomberg) Citigroup Inc. unexpectedly lost a legal battle to recover half a billion dollars it sent Revlon Inc. lenders, after the embarrassing blunder forced it to answer to regulators and tighten its internal controls.U.S. District Judge Jesse Furman on Tuesday ruled that 10 asset managers for the lenders which include Brigade Capital Management, HPS Investment Partners and Symphony Asset Management don’t have to return $504 million that Citibank said it mistakenly transferred in August while trying to make an interest payment. He said they shouldn’t have been expected to know that the transfer, which totaled more than $900 million before some lenders returned their share, was an error.“To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion would have been borderline irrational,” wrote Furman, who presides in Manhattan.The decis
Read more about Citigroup can t recoup Revlon payouts after nearly $900 mn gaffe: US judge on Business Standard. The case stemmed from an incident where Citigroup, acting as Revlon s loan agent, wired $893 million to Revlon s lenders, appearing to pay off a loan not due until 2023
A New York judge has ruled that the Revlon lenders Citigroup mistakenly repaid can keep the money.
The court decision, written by New York Southern District Court Judge Jesse Furman, shows that he ruled in favor of the 10 investment advisory firms Citi sued in August. The 10 defendants collectively received more than $500 million of the mistaken wire transfers in August, according to the judge, while other lenders returned the money and avoided the lawsuit.
“We strongly disagree with this decision and intend to appeal,” a Citi spokesperson said via email Tuesday. “We believe we are entitled to the funds and will continue to pursue a complete recovery of them.”
Citigroup cannot recoup Revlon payouts after nearly $900-million gaffe: U.S. judge Jonathan Stempel Bookmark Please log in to listen to this story. Also available in French and Mandarin. Log In Create Free Account
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Mike Segar/Reuters
A federal judge on Tuesday said Citigroup Inc. is not entitled to recoup half a billion dollars of its own money that it mistakenly wired lenders of Revlon Inc. , in what he called “a banking error of perhaps unprecedented nature and magnitude.”
U.S. District Judge Jesse Furman in Manhattan said the Aug. 11, 2020, transfers were “final and complete transactions, not subject to revocation.”